Consideration
22 When the matter was before me on 6 December, Mr Kalyk appeared to accept that the approach this Court took to an application for a stay pending a special leave application was that set out in my judgment in Miller. In that judgment I explained that in a line of authority commencing with Sibuse Pty Ltd v Shaw (No 2) (1988) 13 NSWLR 125, (Hope and Priestley JJA, Kirby P dissenting as to the result but not as to the principles) the Court had held that a stay would be granted pending an application for special leave to appeal to the High Court if it was "appropriate". As I said (at [23]) Sibuse has been seen in subsequent authorities in this Court as requiring the application of a less stringent standard in considering an application for a stay pending a special leave application than that which the High Court applies. In the High Court, the jurisdiction to grant a stay pending a special leave application is only exercised prior to a grant of special leave in exceptional circumstances: Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [No 1] [1986] HCA 84; (1986) 161 CLR 681.
23 The divergence of approach I identified in Miller was referred to without demur by Tobias JA (Ipp and Campbell JJA agreeing) in Bennette v Cohen (No 2) [2009] NSWCA 162 (at [63] - [65]). Jagot J also accepted that such a divergence of approach existed, and that she would, if necessary, apply the less stringent approach, in SZKUO v Minister for Immigration and Citizenship [2009] FCA 1570; (2009) 262 ALR 632 (at [8] - [10]).
24 The Victorian Court of Appeal applies the exceptional circumstances test, being of the view that Sibuse did not suggest any different approach: see Palmer v Permanent Custodians Ltd [2009] VSCA 164 (at [55]) per Dodds-Streeton JA (Beach AJA agreeing). It is possible that the reason for the divergence of views recognised in this Court, but not apparently in Victoria, lies in the fact that it appears that in that State, the exceptional circumstances test is also applied where a stay is sought from a first instance judgment to that Court of Appeal, whereas this Court has rejected that approach at: Alexander v Cambridge Credit Corporation Ltd (Receivers appointed) (1985) 2 NSWLR 685.
25 As I have said, Mr Rayment contended for the approach outlined in summary in Miller, but argued that even if the exceptional circumstance test was applicable, it was satisfied in at least one respect in this case by the respondents' threat to bankrupt the applicant: see Sopov v Kane Constructions Pty Ltd [2009] VSCA 216 (at [54] ff) per Mandie JA and Beach AJA. In those passages in Sopov, the Court referred to a number of Victorian decisions which establish that the prospect of bankruptcy rendering an appeal nugatory is a relevant, but not decisive, factor to be considered in an application for a stay, but that the court must always take all the circumstances into account, including whether the applicant for a stay has an arguable case on appeal, or, relevantly, on an application for special leave to appeal.
26 The test applied in this Court to granting a stay should be applied. That is to say, a stay should be granted pending an application for special leave to appeal if it is "appropriate".
27 Mr Kalyk submitted that a stay should not be granted because the Court should take judicial notice of the likelihood that the Federal Court on the hearing of any petition for sequestration, would adjourn such application to the completion of appeal processes, referring to the approach taken by Mason P in State Bank of New South Wales v Currabubula Holdings Pty Ltd [2001] NSWCA 239 (at [26], [27] and [29]). In that case, Mason P said:
"27 I have previously referred to O'Hern v Deputy Commissioner of Taxation (1987) 76 ALR 137 at 148 which indicates that as a general principle a court faced with an application to make a person bankrupt or to wind up a company can and normally will grant an adjournment of the hearing of the petition pending the exercise of proper appellate rights. I think it quite likely, and I do not really understand the State Bank to contend to the contrary, that any summons to wind up would not proceed to a hearing at least so long as the claimants prosecute with diligence their application for special leave. Perhaps they will have to prosecute it with even more diligence by pressing for expedition but I say nothing more on that account."
28 I have two difficulties with Mr Kalyk's reliance on that passage. The first is that, if he is contending that I should refuse a stay and leave it to the Federal Court to hear, again, the arguments canvassed before me over two days and determine whether to adjourn the bankruptcy petition, I would regard such an approach as endorsing a duplication of costs in a manner inconsistent with this Court's overriding purpose (s 56, Civil Procedure Act 2005 (NSW)) and, I might add, the Federal Court's overarching purpose: s 37M,. Secondly, as can be seen, the successful party before Mason P had indicated it would not pursue a winding-up application if the claimants prosecuted their application for special leave with diligence. The respondents have not taken such a benign approach - rather indicating that they intend, absent a stay, to seek, at least, to enforce the writs of execution they have placed over the properties.
29 I have paid anxious consideration to Mr Kalyk's submissions concerning the position revealed by the applicant's evidence in relation to the mortgages, the securities, her income, and his submission about whether in fact a default has already occurred on some or all of the Arab Bank facilities. It is not for me to reach a final view on the latter point. All I can say is that it would appear that if the Arab Bank were of the view that the service of the bankruptcy notice constituted an event of default under its securities, it does not appear, when one has regard to Ms Barwick's conversation with Mr Aboud last week, that it presently intends to take any steps in relation to it. Otherwise, although I appreciate there is an apparent discrepancy between the interest burden to which the applicant is subject under the securities compared to her annual income, she is currently servicing the loans, and there is no evidence before the Court save as the matters to which I have referred of any indication of any default under those securities at this stage, nor is there any evidence that any of the mortgagees have taken any steps to notify an event of default.
30 Mr Kalyk submitted that I should require as a condition of any relief I was minded to grant, that the applicant put one of her properties on sale "on an appropriate basis [that] will ensure they are sold". It does not seem to me that I should order the applicant to sell one of the properties. She has in the past, as I have said, taken steps to sell at least two of them and, for whatever reason, has been unsuccessful in doing so to date. There is an apparent excess of assets over liabilities which would in due course in my view be available to meet what appears to be the judgment debt presently outstanding under the Court of Appeal judgment. The position as to costs has not been explored.
31 In my view, the applicant has established that were the respondents to move to bankrupt her or to enforce the writs of execution, then her financial position would be substantially jeopardised and indeed she may be in a position where she will be unable to proceed with the application for special leave to appeal. In such circumstances, in my view she has established a prima facie case that it is appropriate to grant a stay subject to considering other aspects of the matter, in particular the prospects of success on the special leave application
32 I turn to consider the applicant's prosects of success on the special leave application, bearing in mind the natural diffidence a single judge of this Court exercises in anticipating the outcome of a special leave application.
33 I have seen the applicants' submissions in support of the special leave application. They rely in particular on two English cases said to support the proposition that, contrary to decisions of this Court, including the judgment the subject of the special leave application, the parol evidence rule applies in equity. Those two cases are Winch v Winchester (1812) 1 Ves & B 375; 35 ER 146 and Clowes v Higginson (1813) 1 Ves & B 524; 35 ER 204. In both cases it was held that parol evidence was not admissible to resist an application for specific performance if the purpose of the evidence was merely to seek to vary, add to or explain a written agreement.
34 It has to be said neither authority has received substantial consideration in texts on equity. Neither is referred to in Meagher, Gummow & Lehane, Equity Doctrines and Remedies, 4th ed (2002) LexisNexis. Clowes v Higginson is referred to in Ashburner's Principles of Equity, 2nd ed (1933), Butterworth & Co (Publishers) Ltd (at 394) apparently as authority for the contrary proposition, namely that no rule of evidence prevents a defendant to a specific performance suit from showing that the document signed does not accurately express the terms of the contract.
35 The judgment under appeal explores the history of promissory estoppel, pointing out that it is an equitable doctrine which was recognised in Hughes v Metropolitan Railway Co (1877) 2 App Cas 439 and subsequent decisions, none of which appear to have referred to either Winch v Winchester or Clowes v Higginson. It applies Bank Negara Indonesia v Hoalim [1973] 2 MLJ 3 pointing out (at [68]) that that decision was referred to with approval in Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387 by Mason CJ and Wilson J (at 399), by Brennan J (at 420), and by Gaudron J (at 459). That case was, however, one in which the High Court held that although for want of an exchange of parts no binding agreement for a lease had come into existence, a company which had impliedly promised that it would enter into a lease was, in circumstances which would otherwise be unconscionable, estopped from denying that it was bound to proceed with the lease.
36 In the judgment under appeal, Handley AJA referred (at [71]) to Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 271 (at [35]) where the Court, in the joint judgment of Gleeson CJ, McHugh, Kirby, Hayne and Callinan JJ said:
"Where parties entered into a written agreement, the Court will generally hold them to the obligations which they have assumed by that agreement. At least, it will do so unless relief is afforded by the operation of statute or some other legal or equitable principle applicable to the case."
37 Handley AJA then said:
"72 The case is significant because, despite the parol evidence rule, the High Court remitted issues to the Queensland Court of Appeal which included the promissory estoppel pleaded by the borrowers. The judgment of Holmes J on the remitted issues: [2006] QCA 194 at [118]-[119] contains further dicta in support of the views expressed above."
38 Mr Rayment observes that there was no mention in Equuscorp in the High Court of promissory estoppel at all, let alone as a remitted issue - submitting that issue only appeared in the pleadings when the matter was remitted. Mr Kalyk's detailed written submissions, arguing there was no prospect of success on the special leave application, did not suggest the contrary.
39 In his written submissions, Mr Kalyk referred to a number of decisions of intermediate courts of appeal in New South Wales, Queensland and in the Full Federal Court, in which he contends that the propositions raised by the applicant in her special leave application were considered and rejected or commented upon adversely.
40 He also drew attention to views expressed on promissory estoppel in Waltons Stores, Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 and Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101. He submitted that in Waltons Stores the High Court "approved of the principle enunciated in that case as not being constrained to contracts already in existence, but as extending to conduct before the entry in contracts". I do not understand the passages of Waltons Stores to which he refers as being authority for that proposition. As far as the three High Court authorities to which he referred are concerned, none concerned a representation alleged to conflict with a written contract.
41 It is apparent from at least two of the decisions to which Mr Kalyk refers in his submissions Branir Pty Limited v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 and Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 264 ALR 15 that the question of the extent to which an estoppel can outflank contractual rules has been the subject of anxious consideration at intermediate appellate court level in this country. The point does not appear to have been considered by the High Court. In such circumstances it seems to me that the applicant has some prospects of obtaining a grant of special leave to appeal. Whether or not such a grant will ultimately lead to a decision in her favour does not, of course, necessarily follow.