Before the Court is a Notice of Motion filed 25 March 2022 by the defendants, the applicants on the motion, for orders in substance for a stay of execution of a judgment of his Honour Judge Russell SC handed down on 14 December 2021: see Pyramids Render Stars Pty Ltd v Akkari Group Pty Ltd & Anor [2021] NSWDC 672. The orders sought in the stay application include that the stay be granted until the parties consent in writing for it to be lifted or until further application by an interested party. Orders of that nature would not be made and it is normal for orders to be made seeking a stay until the resolution of the appeal.
It is noted that the application was not made, as in the usual course, to the trial judge, who is more familiar with the facts to determine an application. The Notice of Motion was filed more than three months after the reasons for decision were given by his Honour and the orders made.
In support of the Motion, an affidavit of Samir Karnib dated 25 March 2022 was read. That affidavit attaches a Notice of Appeal and other documents. It seems that the reason that led to the Motion is the attempts by the plaintiff to enforce its judgment, and a refusal by the plaintiff to indicate that it would stop doing so.
It should reasonably be inferred by a party that, unless there is an indication in writing to the contrary, the successful party will enforce their judgment. A stay should have been sought from the trial judge as soon as a view was formed that it was likely that an appeal was to be made. It is noted that a Notice of Intention to Appeal was filed on 11 January 2022.
The affidavit of Mr Karnib does not refer to any evidence relating to the financial position of the plaintiff or the defendants. There is no evidence before me as to the capacity of the plaintiff to repay the judgment amount or the defendants' position, including whether the payment of the judgment moneys would cause hardship or business dislocation. No offer has also been made by the defendants to pay the money into court or to provide security. The only offer that has been made is an undertaking by the defendants not to sell property sought to be realised except in the ordinary course of business.
PYRAMIDS RENDER STARS PTY LIMITED v AKKARI GROUP PTY LIMITED [2022] NSWDC 134 | Case summary | Zoe
Mr Tiliakos, who appears for the defendants on the Motion, refers to the fact that an appeal has been filed and the appeal is to set aside the judgment. He submits the balance of convenience favours doing that. As I indicated, there is no evidence before the Court indicating or establishing the balance of convenience in favour of the defendants other than the plaintiff is seeking to enforce the judgment and an appeal has been filed. When the lack of evidence relating to the balance of convenience was pointed out to Mr Tiliakos, he sought to apply for an adjournment.
Ms Holmes, who appears for the plaintiff, opposed both the adjournment application and the stay. In relation to the adjournment application, it was submitted that confirmation was sought earlier this week that the affidavit of Mr Karnib was the only evidence that would be relied upon by the defendants. Mr Tiliakos confirmed that and the parties were informed that it was likely that a hearing would occur today in relation to the application.
In relation to the adjournment application, I note the following matters:
1. The judgment was handed down on 14 December 2021;
2. There is no evidence of any application being made to the trial judge at any time for a stay;
3. The affidavit of Mr Karnib shows that the Notice of Intention to Appeal was filed on 11 January 2022, some time ago, yet no application was made to Judge Russell early in the court year for a stay;
4. The affidavit annexes a Notice of Appeal. It appears that one of the significant grounds of appeal was that the plaintiff was entitled to $302,861.17 and it is said that his Honour's decision was baseless and that there was no proper reasoning. It is noted that in his Honour's reasons for decision, his Honour referred in paragraph 27 to the reason why that amount was owing, being it was the total debt payable if the payment was not made in accordance with the agreement as found. It is also noted that even the amount of $80,000, which was one alternative version of the debt, has not been paid. No submissions were made to me by Mr Tiliakos in relation to whether the appeal was arguable. He merely relied on the Notice of Appeal. I am prepared to accept that the Notice of Appeal is potentially arguable for the purposes of the application.
The underlying debt in the matter goes back to an initial claim in 2019 which was settled by a deed in December 2020, which, it seems, was then the subject of further dispute which gave rise to correspondence which was said to amount to a binding contract, which is what his Honour found. This was why his Honour gave the curious summary in paragraph 1 of the judgment to the following effect: "This judgment is the resolution of a dispute about the resolution of a dispute about the resolution of a dispute".
Having regard to there being a clear need to put all evidence in support of the application before the court, the delay that I have referred to, the fact that the defendants confirmed the evidence they were relying on and the fact that the Motion was listed on their application, in my view it is not in the interests of justice to grant an adjournment which would further delay the determination of the Motion. In my view, whilst I take into account the difficult position that sometimes defendants face when they have orders against them, there is no evidence that that would cause particular economic problems in the present case.
In relation to the principles to be applied on the application, they were set out by the Court of Appeal in Alexander v Cambridge Credit Corporation Limited (1985) 2 NSWLR 685 at 694-5 where the following was stated:
"The onus is upon the applicant to demonstrate a proper basis for a stay that will be fair to all parties: Trlin. The mere filing of an appeal will not, of itself, provide a reason or demonstrate an appropriate case, nor will it discharge the onus which the applicant bears: see Supreme Court Rules, Pt 51, r 10; Waller v Todorovic. The Court has a discretion whether or not to grant the stay and, if so, as to the terms that would be fair. In the exercise of its discretion, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties before it: Attorney-General v Emerson (1889) 24 QBD 56. Where there is a risk that if a stay is granted, the assets of the applicant will be disposed of, the Court may, in the exercise of its discretion, refuse to grant a stay: cf Clyne v Deputy Commissioner of Taxation (1982) 56 ALJR 857. Sometimes as a condition of the grant of a stay, where funds are (1985) 2 NSWLR 685 at 695 available, a court will impose on the applicant the payment of the whole, or part, to the judgment creditor: Andrews v John Fairfax & Sons Ltd [1979] 2 NSWLR 184. Even where no order is made for the payment of part of a verdict, it is not at all unusual for the Court, in the exercise of its discretion, to grant a stay on terms that the appellant give to the judgment creditor security in terms defined by the Court as appropriate to the fair adjustment of the rights of the parties."
The following is clear:
1. The onus is upon the applicant to demonstrate a proper basis for a stay that will be fair to all the parties;
2. The mere filing of an appeal will not, of itself, provide a reason or demonstrate an appropriate case, nor will it discharge the onus which the applicant bears;
3. The Court has a discretion whether or not to grant the stay and, if so, as to the terms that would be fair;
4. In the exercise of its discretion, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties before it;
5. Where there is a risk that if a stay is granted, the assets of the applicant will be disposed of, the Court may, in the exercise of its discretion, refuse to grant a stay;
6. Where there is a risk that the appeal would prove abortive if the appellant succeeds and a stay is not granted, Courts will normally exercise their discretion in favour of granting a stay. This is particularly the case where unless a stay is granted, an appeal will be rendered nugatory. That is a substantial factor in favour of a stay.
The matter was further considered by Basten JA in Yeshiva Synagogue Inc v Karimbla Properties (No 10) Pty Limited [2017] NSWCA 331 at [15]-[17]. His Honour noted that:
"… the Court is exercising a discretionary power and will need to weigh the hardship and inconvenience likely to be caused to each party by granting or not granting the order sought."
His Honour continued:
"The relevant circumstances are likely to include the period for which the relief will need to operate, the promptness with which the applicant for relief has come to the Court and the strength of the proposed appeal."
His Honour said: "the inquiry is usually constrained to a determination whether the appeal is reasonably arguable."
As I indicated, no submissions were made by the applicant on this issue.
The decision in Alexander v Cambridge Credit has been referred to with approval in numerous later cases. Ms Holmes of counsel, who appeared for the plaintiff, relied on the decision of Vaughan v Dawson [2008] NSWCA 169. I refer to the very recent considerations of Payne JA in Zhu v Wang [2021] NSWCA 149 at [33] and of his Honour Justice Leeming in Trentelman v The Owners - Strata Plan No 76700 [2021] NSWCA 62 at paragraphs 18-20.
Although no submissions were made to me by Mr Tiliakos on the issue, having looked at the grounds of appeal, while in my view it appears that his Honour has given proper reasons, there are potential issues relating to the proper construction of whatever agreement was reached. The appeal would not, in my view, appear to be hopeless and I approach the matter on that basis.
However, the evidence before the Court is entirely deficient on the balance of convenience issue. As indicated by the Court of Appeal in Cambridge Credit, the mere filing of a Notice of Appeal is not enough. The mere finding of an arguable or barely arguable case is not enough. The Court must balance the factors, and on the evidence before the Court, there is no evidence whatsoever in relation to the parties' positions. I take into account that the application was not made to the trial judge and it is made more than three months after the reasons for decision were handed down.
Mr Tiliakos, in the adjournment application which I have already rejected, said that he could receive instructions in relation to the financial position of the defendants. Whilst that is possible, there is no mention of the financial position of the plaintiff. Nor is there any evidence before me as to the plaintiff's financial position. No offer was made to pay the money into court or to provide security for the amount of the judgment sum. The latter matters are significant matters in considering whether the Court would grant the orders sought.
Having regard to all the matters that I have referred to, in my view, the application does not establish the requirements of Alexander v Cambridge Credit. There is no evidence on the balance of convenience issue. As a matter of discretion, no application has been made to the trial judge. While that is only a small factor as this Court is in a position to deal with the application on the evidence, there has been some delay.
Having regard to all those matters, I make the following orders. In relation to the Notice of Motion filed 25 March 2022:
1. The defendants' application for an adjournment of the Notice of Motion is dismissed;
2. The Notice of Motion is dismissed.
[Submissions were received as to costs]
An application has been made by the plaintiff for costs and on an indemnity basis. In relation to costs on the usual basis, Mr Tiliakos does not wish to be heard. In relation to costs on an indemnity basis, while there is no evidence before the Court on the balance of convenience issue, in my view there is nothing to indicate that this was an extreme case or involved conduct which would warrant such an order. I decline to make it. Accordingly, the order I make is:
(3) The defendants are to pay the plaintiff's costs of the Notice of Motion as agreed or assessed.
[2]
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Decision last updated: 29 April 2022