Adeels Palace Pty Ltd v Moubarak

[2009] NSWCA 130

New South Wales

Court of Appeal

CITATION:	Adeels Palace Pty Ltd v Moubarak; Adeels Palace Pty Ltd v Najem (No.2) [2009] NSWCA 130
HEARING DATE(S):	25 May 2009
JUDGMENT DATE:	25 May 2009
JUDGMENT OF:	Hodgson JA at 1
EX TEMPORE JUDGMENT DATE:	25 May 2009
DECISION:	In each case: · I note the undertaking to the Court by the applicant to prosecute the application and any appeal in the High Court expeditiously, and on that undertaking and subject to the condition that I will mention, I make order (1) in the Notice of Motion as filed in Court to-day. · That order is subject to the condition that within fourteen days the applicant will provide security for the judgment debt and interest as agreed between the parties or as approved by the Registrar and if that condition is not satisfied the stay will come to an end. · I give leave to the applicant to apply on 1st June 2009 to have this condition removed and I direct that any evidence in support of such application be served on or before midday on 28 May 2009. · I order that the costs of the application to date be costs in the application for special leave to appeal. · I stand the Notice of Motion over to the 1st June 2009 before the Registrar to enable the application to remove the condition to be made, if it is to be made.
CATCHWORDS:	PROCEDURE – Application for stay of judgment – Whether there is an onus on the applicant to exclude appreciable risk that delay will cause the applicant to be less able to meet the judgment.
CATEGORY:	Procedural and other rulings
CASES CITED:	Adeels Palace Pty Ltd v Moubarak; Adeels Palace Pty Ltd v Najem [2009] NSWCA 29 Alexander v Cambridge Credit Corporation (1985) 2 NSWLR 685 Carr v Swart [2007] NSWCA 135 Jennings Construction Limited v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681 John Fairfax & Sons Limited v Kelly (No. 2) (1987) 8 NSWLR 510 Walker v Lakatoi Universal Pty Ltd [2000] NSWCA 318
PARTIES:	ADEELS PALACE PTY LTD (applicant in both matters) Anthony MOUBARAK (opposing party in 40024/08) Antoin Fayez Bou NAJEM (opposing party in 40025/08)
FILE NUMBER(S):	CA 40024/08; 40025/08
COUNSEL:	J SEXTON SC (applicant (in both matters)) D C MORGAN (opposing party (Moubarak)) J W CATSANOS (opposing party (Najem))
SOLICITORS:	Lee & Lyons Lawyers (applicant (in both matters)) Leitch Hasson Dent, Solicitors (opposing party (Moubarak)) Sanford Legal (opposing party (Najem))
LOWER COURT JURISDICTION:	Court of Appeal
LOWER COURT DATE OF DECISION:	26 February 2009
LOWER COURT MEDIUM NEUTRAL CITATION:	Adeels Palace Pty Ltd v Moubarak; Adeels Palace Pty Ltd v Najem [2009] NSWCA 29

CA 40024/08
CA 40025/08

HODGSON JA

25 MAY 2009

ADEELS PALACE PTY LIMITED v MOUBARAK;

ADEELS PALACE PTY LIMITED v NAJEM (No. 2)

Judgment

1 HODGSON JA: In proceedings in the District Court the applicant, Adeels Palace, was found liable to Mr Moubarak and Mr Bou Najem for damages for negligence. Mr Moubarak’s damages were assessed at a little over $1 million, and Mr Bou Najem’s damages were agreed at $170,000. Adeels Palace appealed to the Court of Appeal, and on 26 February 2009 the appeals were dismissed: [2009] NSWCA 29.

2 Adeels Palace has now applied for special leave to appeal to the High Court of Australia, and seeks a stay of execution of the judgments. The principles on which a stay may be granted are set out in Alexander v Cambridge Credit Corporation (1985) 2 NSWLR 685. Prima facie the successful party is entitled to the benefit of a judgment, but a stay may be granted where an applicant demonstrates an appropriate case to warrant the exercise of discretion in its favour. Very often this appropriate case is demonstrated by showing there are arguable grounds of appeal, and that there is a significant risk that, if money is paid to the judgment creditor, this money or a substantial part of it will be irrecoverable if the appeal succeeds.

3 In cases where the application for stay is made to the Court of Appeal in connection with an application for special leave to appeal to the High Court, the first question is really whether there is a reasonable basis for the application for special leave; and this is not a high threshold, because the stay is initially for the relatively short period until the High Court deals with the application for special leave. If that application is refused, the stay comes to an end; while if the application is granted, that itself clearly establishes there are arguable grounds of appeal. (See Jennings Construction Limited v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681; John Fairfax & Sons Limited v Kelly (No. 2) (1987) 8 NSWLR 510) In my opinion, there is a reasonable basis in this case for an application to be made for special leave to appeal.

4 The second usual requirement of showing a significant risk that, if money is paid to the judgment creditor, this money or a substantial part will be irrecoverable, is in my opinion also satisfied in this case. In the case of Mr Moubarak, there is evidence of very limited earning capacity, and evidence that he is not presently an owner of real property; and there is no evidence from him of any capacity to repay. In the case of Mr Bou Najem, there is evidence of limited assets and limited earning capacity, evidence of a substantial home loan debt, but also evidence of no real property actually in his own name; and there is no evidence from him supporting a capacity to repay.

5 However that is not the end of the matter. As stated in Alexander at 694, the onus is on an applicant to demonstrate a proper basis for a stay that will be fair to all parties. It has been put for Mr Moubarak and Mr Bou Najem that this means there is an onus on an applicant to prove that a delay caused by a stay, which if the High Court grants special leave could be a year or two, will not involve any significant risk that the applicant will be less able than now to meet the judgment. It was put for them that, if the applicant does not prove this, the stay should be granted only on condition that security be given for the amount of the judgment debt. I note that conditions of this general kind were imposed in Alexander itself, and similar conditions were imposed in Walker v Lakatoi Universal Pty Ltd [2000] NSWCA 318 and in Carr v Swart [2007] NSWCA 135.

6 Mr Sexton SC for the applicant submitted that the applicant was only notified on Friday by Mr Moubarak’s solicitors that Mr Moubarak would seek a condition along these lines. He also submitted there was no evidence that delay would involve any risk of the applicant becoming less able to meet the judgments.

7 In my opinion the onus referred to in Alexander does mean that, unless the circumstances make it reasonably clear that delay will not involve a risk of diminished ability to pay, there is an onus on an applicant to show that there is no such risk of this kind as to justify refusing a stay or imposing conditions to minimise the risk. If the applicant for a stay is a Government instrumentality, or if the case is a motor accident case or a case between an employer and an employee, where the court can assume there is a satisfactory statutory insurance policy in place, then there will probably not need to be any evidence about this. However in other cases, in my opinion, it may be necessary for an applicant to bring evidence excluding this risk, or showing that it is small; and I do not see any reason why that is not so in this case.

8 The applicant may have been taken by surprise by this point, so what I am presently minded to do is to grant a stay in each case, on the usual terms, but also on condition that the applicant gives such security for the judgment debts and interest within fourteen days as is either agreed by the respondents or approved by the Registrar; but to give leave to the applicant to apply next week on evidence served by one day this week to have that condition removed. I would propose that the costs of the motions to date be costs in the proceedings.

Orders

9 In each case:

· I note the undertaking to the Court by the applicant to prosecute the application and any appeal in the High Court expeditiously, and on that undertaking and subject to the condition that I will mention, I make order (1) in the Notice of Motion as filed in Court to-day.

· That order is subject to the condition that within fourteen days the applicant will provide security for the judgment debt and interest as agreed between the parties or as approved by the Registrar and if that condition is not satisfied the stay will come to an end.

· I give leave to the applicant to apply on 1st June 2009 to have this condition removed and I direct that any evidence in support of such application be served on or before midday on 28 May 2009.

· I order that the costs of the application to date be costs in the application for special leave to appeal.

· I stand the Notice of Motion over to the 1st June 2009 before the Registrar to enable the application to remove the condition to be made, if it is to be made.

**********