Tyndall v ACN 062 895 774 Pty Ltd [2007] NSWCA 102 | Case summary

23 April 2007 Tyndall v ACN 062 895 774 Judgment - Ex Tempore 1 McCOLL JA: This is an application by Dianne Tyndall seeking a stay of the orders of the Court of Appeal made on 27 March 2007, until such time as the claimant's rights of appeal to the High Court have been exhausted. She also seeks an order restraining the opponent from selling, disposing, encumbering, or otherwise dealing with the subject property at 4 Carlow Avenue, Killarney Heights until those rights of appeal rights have been exhausted, unless a debt represented by the judgment of this Court in proceedings number 1594 of 1998 is paid. 2 The facts relating to the application are fully set out in the judgment of this Court of 27 March 2007 referred to in the first prayer for relief: ACN 062 895 774 Pty Ltd v Tyndall [2007] NSWCA 64. They can be shortly stated for the purposes of this judgment by reference to the headnote. 3 The opponent is a company which was registered by a Mr Clee, the claimant's former de facto partner. It was the corporate entity through which he conducted a debt collecting business. It also operated as the trustee of his property and superannuation fund. 4 In 1994 the claimant and Mr Clee, who were then living in a de facto relationship, selected the property referred to in the second prayer for relief at Killarney Heights as their home. The opponent purchased it but it was subject to a one hundred per cent mortgage to the ANZ Bank. Mr Clee paid the mortgage instalments. 5 In due course the relationship between Mr Clee and the claimant came to an end and he moved out of the home in Killarney Heights. The claimant commenced proceedings in the Equity Division in those proceedings numbered 1594 of 1998 to enforce a cohabitation agreement which had been entered into between Mr Clee and herself pursuant to the De Facto Relationships Act 1984 (now the Property (Relationships) Act 1984). Mr Clee defended the proceedings which were in due course settled on terms by which judgment was entered for the claimant against Mr Clee in a sum of $750,000. 6 The claimant remained in occupation of the Killarney Heights home until in 2004 the opponent made a demand for her to surrender possession. The opponent commenced proceedings against the claimant in the Common Law Division seeking possession of the Killarney Heights property and other relief. In defence the claimant pleaded facts said to establish a lien in respect of her continued possession until the judgment debt arising from the agreement with Mr Clee in the Equity Division proceedings was satisfied in her favour. 7 Mr M Sahade, who appears for the claimant, informed the Court that the defence was the subject of an unsuccessful strike-out application by the opponent. Justice Hislop who heard the application ruled - I am informed - that the claim was sufficiently arguable not to be struck out presumably on a General Steel basis: General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125. In due course Justice Sully who heard the Common Law proceedings found in the claimant's favour. His Honour declared that she had a valid lien over the Killarney Heights property and was entitled to continue in possession of that property. He dismissed the opponent's claim for possession. It was that matter which came on appeal to this Court. 8 The appeal was allowed. Mason P delivered the lead judgment with which Justice Beazley and Justice Ipp agreed. It is from that judgment that the claimant has sought special leave to appeal to the High Court. Her special leave application was filed on 20 April this year. 9 Since the judgment of this Court was handed down on 27 March, the opponent's solicitors have communicated with the claimant's solicitors seeking their advice as to when the claimant would leave the Killarney Heights premises. Those solicitors have in turn advised the opponent's solicitors that the claimant expects to be in a position to vacate by Friday this week, 27 April. That intention apparently persists despite the claimant having now filed her application for special leave. 10 The opponent has led evidence that its holding costs in relation to the property are $965.38 a week. Mr Durston who appears for the opponent has drawn attention to a statement in the claimant's affidavit in the Common Law Division proceedings on 15 April 2005 that as at that date she was unemployed. Mr Sahade conceded that that position has not changed. 11 When the evidence concluded Mr Sahade said that the claimant would undertake, as a condition of the granting of the relief sought in the notice of motion, to prosecute the application for special leave with due diligence and would also give an undertaking as to damages in relation to any loss incurred as a consequence of the injunction and the stay sought having remained in place. 12 The principles concerning the grant of a stay, and I would add an injunction, pending an application for special leave to appeal to the High Court, were most recently set out by the Chief Justice in Minister of Local Government & Anor v South Sydney City Council (No 3) [2002] NSWCA 327 to which his Honour referred in New South Wales Bar Association v Stevens (No 2) [2003] NSWCA 107. In the South Sydney Council case the Chief Justice observed (at [10]) that the principles applicable to the grant of a stay and of an injunction substantially overlap. 13 His Honour regarded the cases to which he referred in support of that proposition as also being authority for the proposition that an intermediate court of appeal should not be diffident about granting a stay or injunction in an appropriate case, notwithstanding the difficulty that may sometimes be occasioned for a member of an intermediate court of appeal in making an assessment of the prospects of a grant of special leave in a particular case. His Honour observed (at [12]) that it was always material to look at the prospects of success relevantly in such a case, the prospects of a grant of special leave and also whether or not the prospects of a successful appeal would make any practical difference to the rights and interests of the appellant unless a stay or injunction was granted. 14 Dealing with the latter factor his Honour pointed out that various formulations had been adopted as appropriate to the particular circumstances of a case, one of which was that of preserving the subject matter of the litigation. His Honour then set out a number of variations on that verbal formula, including foreclosing the utility of an appeal. As his Honour pointed out (at [14]) all of these formulations relate to the effect of not granting a stay or an injunction on the rights or obligations or interest of the putative appellant. 15 The application for leave to appeal which the claimant has filed is, I am informed, in compliance with the High Court rules. It states as the grounds of appeal that the Court of Appeal erred in holding that the claimant did not have equitable lien in respect of the Killarney Heights property. Mr Sahade has submitted that there are reasonable prospects that special leave to appeal will be granted because the last time the High Court dealt with the issue of an equitable lien was in Hewitt v Court [1983] HCA 7; (1983) 149 CLR 639 and that the High Court had never dealt with a case of an equitable lien created by a non-owner. He also relied upon the claimant's success before Sully J, as well as in the strike-out application before Hislop J, as indicating the claimant's application for special leave to appeal had some prospects of success. 16 Mr Durston submits that the prospects of the High Court granting leave to appeal are slim as the case turns on the particular facts and raises no question of general importance. 17 In the Court of Appeal judgment Mason P dealt (at [28]-[32]) with the reasons of the primary judge, Justice Sully. His Honour noted (at [31]) that Justice Sully had concluded that Mr Clee was the directing mind and will of the appellant and that he controlled its affairs in such a way that he had a capacity to treat the property, being I infer the Killarney Heights property, as if it were his own. 18 His Honour then set out (at [32]) the critical finding made by Justice Sully to reach his conclusion in favour of the claimant, then dealt at length with why in his Honour's view neither Justice Sully's reasoning nor the facts sustained the orders under appeal. I shall not deal with the detail of the President's analysis and rejection of the claimant's right to an equitable lien. It is I think sufficient to note that it was critical, as I read his Honour's judgment, to this Court allowing the appeal (at [47]) that the Equity Division proceedings had been prosecuted by the claimant in order to obtain ownership of the Killarney Heights property, but that she had elected to take a money judgment against Mr Clee along with the dismissal of his cross-claim and that all of her asserted rights had passed into the judgment in the Equity Division proceedings. 19 Nothing, the President pointed out (at [48]), had been communicated between the parties in the Common Law proceedings or the parties in the Equity Division proceedings to the effect that the claimant would remain in possession of the Killarney Heights property until the judgment sum in the Equity Division proceedings was paid. 20 Mason P also pointed out (at [61]) accepting and referring to, as I understand it, the alter ego argument that assuming the opponent had been deemed to know everything Mr Clee knew when he consented to the Equity Division judgment, nevertheless the opponent's situation had not changed in any legal or practical way in consequence of the settlement of the Equity Division proceedings. His Honour pointed out that in the language of restitution law the appellant was not enriched, let alone unjustly, by the settlement of the Equity Division proceedings. 21 His Honour then pointed out (at [62]) that by parity of reasoning nothing was done as between the appellant, the opponent before me, and the respondent, the claimant here, at the time when the Equity Division proceedings were settled that could possibly amount to unconscionable or unconscientious behaviour on the part of the appellant. It was for those reasons that the Court allowed the appeal. 22 I am acutely conscious of the significance the Chief Justice attached in the South Sydney City Council case to preserving the subject matter of the litigation. There is evidence in the affidavit of Mr Prassas of 23 April 2007, to which I ought to have referred earlier, that the opponent's solicitor has advised that the opponent intends to sell the Killarney Heights property. It is undoubtedly that statement which prompted today's application. If the Court does not accede to the application then the subject matter of the litigation will not be preserved and it may be that the utility of the appeal will be frustrated. 23 Nevertheless, in my view, the claimant's prospects of obtaining leave to appeal are slim. The case appears to me to turn on very special facts. It may touch upon a novel principle of law but novel principles of law alone are not sufficient to attract leave to appeal to the High Court. 24 In that light, and doing my best to balance the two factors of frustrating the utility of an appeal against the arguable prospect of special leave being granted, and taking into account that the undertaking as to damages which the claimant proffers appears not to be supported by any financial ability to compensate the opponent for the loss which will arise if the opponent cannot obtain relief from the continuing burden of the holding costs of the property, I am not satisfied that the claimant has made out a basis for the relief granted in the notice of motion. 25 I propose therefore to order that the notice of motion be dismissed with costs unless there is anything you can say against that Mr Sahade.

Tyndall v ACN 062 895 774 Pty Ltd

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Judgment (17 paragraphs)

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Cases Cited (9)