Alananzeh v Zgool Form Pty Ltd (No 2)

[2024] ACTSC 258

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Alananzeh v Zgool Form Pty Ltd (No 2)

Citation: 

[2024] ACTSC 258

Hearing Date: 

2 August, 12 August 2024

Decision Date: 

19 August 2024

Before:

McWilliam J

Decision: 

(1)    The judgment given on 26 June 2024 is stayed pending determination of the plaintiff’s appeal and the second defendant’s cross-appeal, on the condition that the second defendant pay to the plaintiff, within 28 days from the date this order comes into effect, the sum of $45,000.

(2)    Costs of the application are costs in the cause.

Catchwords: 

PRACTICE AND PROCEDURE – Application for stay of order pending appeal and cross-appeal – Judgment in favour of plaintiff in personal injury proceeding – whether impecunious plaintiff – whether serious issues for determination raised on cross-appeal – whether real risk that second defendant may suffer prejudice or damage if the stay is not granted – whether balance of convenience favours maintenance of status quo pending appeal proceeding – where competing rights of the parties requires balance of hardship produced by stay on plaintiff – conditional stay granted

Legislation Cited: 

Civil Law (Wrongs) Act 2002 (ACT) s 47

Court Procedures Rules (2006) (ACT) r 5301

Cases Cited: 

Alananzeh v Zgool Form Pty Ltd [2024] ACTSC 16

Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685

Dreamtime Supply Company Pty Ltd v Steadfast ICT Security [2021] ACTCA 38

Hendricks v El Dik (No 5) [2016] ACTSC 302

Michael Hill Jeweller (Australia) Pty Ltd v Gispac Pty Ltd [2024] NSWCA 128

Woolworths Ltd v Strong (No 2) (2011) 80 NSWLR 445

Parties: 

Ahmad Alananzeh ( Plaintiff)

Zgool Form Pty Ltd (First Defendant)

Xmplar Formwork Pty Ltd (Second Defendant)

Workers Compensation Default Insurance Fund Manager (Third Defendant)

Representation: 

Counsel

D Shillington ( Plaintiff)

N Sinnathurai (Second Defendant)

Solicitors

Law Partners Personal Injury Lawyers ( Plaintiff)

No appearance (First Defendant)

Wotton & Kearney (Second Defendant)

Moray & Agnew (Third Defendant)

File Number:

SC 90 of 2022

McWILLIAM J:          

1․On 26 June 2024, I delivered judgment in this proceeding in favour of the plaintiff in the sum of $243,900 and ordered the first and second defendants to pay the plaintiff’s costs, with the third defendant to pay its own costs: see Alananzeh v Zgool Form Pty Ltd [2024] ACTSC 16 (primary judgment). 

2․The first defendant was the plaintiff’s employer and did not participate in the hearing.  The second defendant was a sub-contractor at the relevant construction site where the injury occurred.  The third defendant was the default insurer who was liable to pay any judgment against the first defendant (who did not hold an insurance policy that responded in the Territory) save as to where another defendant was also found liable, which is what occurred when the Court entered judgment against both the first and second defendants.

3․The plaintiff has appealed the judgment.  The second defendant has cross-appealed and by application in proceeding filed 23 July 2024, sought a stay of the judgment.  The appeal proceeding is not yet listed for hearing before the Court of Appeal.   

The application

4․The application did not specify which particular rule of the Court Procedures Rules 2006 (ACT) (Rules) under which it was brought. An application for a stay in these circumstances is governed by r 5301 of the Rules. It provides relevantly that an appeal to the Court of Appeal in a civil proceeding does not operate as a stay of the order appealed from unless either the Court of Appeal or the court otherwise orders. In Hendricks v El Dik (No 5) [2016] ACTSC 302 (Hendricks), Mossop AsJ (as his Honour then was) referred to a number of authorities in accepting (at [10]) that it is appropriate in the first instance to make the application for a stay to the trial judge, who will have a better understanding of the particular circumstances of the case as a result of having heard it.

5․The application for a stay of the judgment was originally heard on 2 August 2024 but was adjourned to enable the second defendant to file its cross-appeal before determining the application, with a view to understanding whether the grounds of the cross-appeal were directed to the liability findings in the primary judgment, or only the quantum findings, as well as limiting the potential for a further application in the Court of Appeal once the cross-appeal was filed.

Applicable Principles

6․The Court determines whether to grant a stay pending an appeal according to well-settled principles, which have recently been set out in Michael Hill Jeweller (Australia) Pty Ltd v Gispac Pty Ltd [2024] NSWCA 128 at [5] as follows:

The principles governing the grant of a stay pending an appeal are well-settled, as the parties on this application agreed. They are analogous to those which govern the grant of interlocutory relief before trial: Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 at 694-5, Kalifair Pty Ltd v Digi-Tech (Australia) Ltd (2002) 55 NSWLR 737; [2002] NSWCA 383 at [18]. A party applying for a stay must show, first, that the appeal raises serious issues for determination by the appellate court; and secondly, that there is a real risk that the appellant will suffer prejudice or damage if the stay is not granted. If an appellant prevails on those two questions, then the Court is to consider the balance of convenience and the competing rights of the parties: Pamplin v Irwin [2024] NSWCA 112 at [11] per Leeming JA.

7․The same principles were applied in this jurisdiction in Dreamtime Supply Company Pty Ltd v Steadfast ICT Security [2021] ACTCA 38 at [8] (emphasis added):

The principles to be applied in considering a stay are well-known and were summarised in Alexander v Cambridge Credit Corporation (1985) 2 NSWLR 685 and repeated in Kalifair v Digitech Australia Pty Ltd [2002] NSWCA 383; 55 NSWLR 737, at [17]:

17. In Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 this Court (Kirby P, Hope, McHugh JJA) restated the principles to be applied in exercising this Court’s jurisdiction to grant a stay pending an appeal. The Court said (694, 695):

“In our opinion it is not necessary for the grant of a stay that special or exceptional circumstances should be made out. It is sufficient that the applicant ... demonstrates a reason or appropriate case to warrant the exercise of discretion in his favour ...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 ... Two further principles may be mentioned. The first is that where there is a risk that the appeal will prove abortive if the appellant succeeds and a stay is not granted, courts will normally exercise their discretion in favour of granting a stay ... where it is apparent that unless a stay is granted an appeal will be rendered nugatory this will be a substantial factor in favour of the grant of a stay”.

8․In Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685, the NSW Court of Appeal went on to say in the same paragraph at 695:

…Secondly, although courts approaching applications for a stay will not generally speculate about the appellant’s prospects of success, given that argument concerning the substance of the appeal is typically and necessarily attenuated, this does not prevent them considering the specific terms of a stay that will be appropriate fairly to adjust the interest of the parties, from making some preliminary assessment about whether the appellant has an arguable case.  This consideration is protective of the position of a judgment creditor where it may be plain that an appeal, which does not require leave, has been lodged without any real prospect of success and simply in the hope of gaining a respite against immediate execution upon the judgment. … 

9․As to what must be shown in order to establish that the appeal raises serious issues for determination by the appellate court, and relevant to the grounds discussed below, in Hendricks, Mossop AsJ stated at [14]:

In terms of assessing the prospects of the appeal, it is not appropriate to attempt anything more than the most bare-bones assessment. I accept that in relation to questions of breach and causation the defendants have an arguable case on appeal. It appears to me that the stronger of the arguments when one looks at the appeal as a whole is in relation to contributory negligence, because inevitably that is a matter upon which reasonable minds might differ where the overall characterisation of, and emphasis upon, a number of different factors can lead to different conclusions.

Issues

10․Applying those authorities, the issues are:

(a)Whether the cross-appeal raises serious issues for determination by the appellate court;

(b)Whether there is a real risk that the cross-appellant (second defendant) will suffer prejudice or damage if the stay is not granted; and

(c)Where the balance of convenience lies, taking into account the competing rights of the parties. 

Does the cross-appeal raise serious issues for determination?

11․There are 8 grounds raised in the cross-appeal filed 9 August 2024.  In the summary that follows, knowledge of the reasoning in the primary judgment is assumed. 

12․First, the second defendant challenges the liability and quantum findings.  In respect of liability, the second defendant asserts error in the finding that a duty of care was owed by it to the plaintiff at all.  The second defendant first challenges a number of factual findings as being against the evidence or without evidence.  It also asserts that the primary judge incorrectly applied the principles concerning the existence of any duty of care owed by a subcontractor who is not the Appellant’s employee.

13․In the alternative, if the finding as to the existence of a duty of care in respect of the second defendant remains, then the second defendant challenges the scope of the duty found. 

14․The next ground of error asserted concerns the finding that the second defendant breached its duty of care.  The complaint is of a failure to “adequately account” for particular aspects of the evidence.  The second defendant contends that it was not open to draw any adverse inference in relation to the second defendant’s failure to call a witness.

15․The second defendant next challenges the approach taken to assessing the plaintiff’s credibility in the proceeding, arguing that the approach was inconsistent.

16․The second defendant also contends error in respect of the finding that there was no reduction to be made for contributory negligence.

17․On the question of quantum, the second defendant argues that there was a wrong approach in applying a global discount of 25% to take account of the possibility that the plaintiff would have been in a similar condition absent the accident owing to a degenerative back condition (both the past hypothetical situation, and the future possibility), combining it as part of a discount which also included the usual discount for vicissitudes, rather than individually reducing each buffer awarded.

18․Although the plaintiff did not accept that the cross-appeal raised serious issues for determination, I am of the view that the second defendant has discharged its onus in that regard.  The grounds of cross-appeal are particularised by reference to specific findings in the judgment and articulate what should have been found instead.  The description above is sufficient to demonstrate that there are arguable prospects on appeal.  They are clearly the product of engagement with the findings at first instance and the errors asserted have some understandable basis. 

19․Nor can it be said that the findings that are attacked, although arguable, are trivial or immaterial to the outcome of the proceeding. There is a possibility of judgment being entered in the second defendant’s favour if the cross-appeal succeeds on either the existence of a duty of care or breach questions, or even on the question of contributory negligence (for example, if a 100% contribution was to be found, resulting in a reduction, in the damages awarded of 100%, pursuant to s 47 of the Civil Law (Wrongs) Act 2002 (ACT) and therefore defeating the claim). I am therefore persuaded that the cross-appeal raises serious issues for determination.

Is there a real risk that the cross-appellant will suffer prejudice or damage if the stay is not granted?  

20․The plaintiff has served a creditor’s statutory demand on the second defendant, seeking to enforce the judgment prior to the determination of the appeal and the cross-appeal.

21․The reason for seeking to enforce the judgment even though the plaintiff is appealing it seems to be that the plaintiff is entirely without funds, even basic living expenses.  The evidence for that position came through an affidavit affirmed by the plaintiff’s solicitor (on instructions from the plaintiff). 

22․In response, the second defendant’s instructing solicitor swore an affidavit deposing to the investigations that she has carried out.  Her investigations revealed that the plaintiff is working as a customer service representative, which led the second defendant to submit that it is not the case that the plaintiff has no means at all.  That kind of investigative evidence was a little difficult to reconcile with what I understood to be the second defendant’s primary reason for seeking the stay, namely that the plaintiff was impecunious, so that if it were compelled to pay any judgment sum over to the plaintiff now and the cross-appeal was ultimately successful, that success would prove abortive because the plaintiff is unlikely to be able to repay such sum.  As neither party sought to cross-examine the solicitors on their evidence, I have broadly accepted their evidence although some matters, such as whether or not the plaintiff can access Centrelink benefits, do not carry much weight.  If he can access Centrelink benefits, it is likely the plaintiff has very little means.

23․The second defendant also argued that if the cross-appeal were successful and the plaintiff had been paid the judgment sum in the meantime, it would have to be repaid to the second defendant with interest, relying on Woolworths Ltd v Strong (No 2) (2011) 80 NSWLR 445 at [25] and the cases there-cited. The plaintiff would thus arguably be in a worse off position, in that not only would he have to repay the judgment sum, but he would need to find the resources to repay it with interest.

24․Further, the second defendant raised the potential prejudice arising from a loss of opportunity to offset its legal costs against any residual judgment sum it may be found to owe upon the conclusion of the appeal proceeding.  That submission was apparently based on an assumption that if successful, there would be an order for its legal costs at first instance, or at least a portion of them, to be paid by the plaintiff.

25․The plaintiff argued that an important consideration in assessing the risk of prejudice to the second defendant is the fact that judgment has also been entered against the first defendant.  There will be no appeal from that aspect of the primary judgment.  He submitted that this case is therefore different from the situation in Hendricks, where there was a risk that the judgment would be completely overturned on appeal: Hendricks at [20]. The plaintiff says he will remain successful in establishing liability against the first defendant. The consequence is that, subject to the contributory negligence ground of appeal, even if the second defendant is ultimately successful on the cross-appeal in respect of liability, the plaintiff will receive a judgment sum paid by the third defendant on behalf of the first defendant.

26․That submission also appears to have been based on an assumption, namely that the second defendant would be either unsuccessful in respect of its challenge to the finding of no contributory negligence (a matter that would also affect the liability found in respect of the first defendant), or that any contribution found would not be to the level where damages were reduced to zero.  

27․Because of that matter, I consider that notwithstanding the lack of any appeal of liability in respect of the first defendant, there exists a risk of at least some degree of difficulty in recovering payments made to the plaintiff pending the determination of the appeal proceeding, arising from a potential outcome on appeal of the plaintiff being awarded less than whatever sum was paid over to him in the meantime.  The cross-appellant has established a real risk of prejudice.

The balance of convenience and the competing rights of the parties

28․That calls into consideration the competing rights of the parties and where the balance of convenience lies. Applying the principles set out at [6]-[9] above, I consider the competing interests of the parties to be balanced by granting the stay but making it subject to a condition that the second defendant pay to the plaintiff a sum of money to meet immediate living expenses and a portion of his legal costs.

29․As to the figure, I consider an appropriate adjustment to be $45,000, which is just under 20% of the current judgment sum.  If the second defendant is successful on the duty of care or breach aspects in its cross-appeal, and becomes entitled to be repaid that amount, such a sum may be able to be recovered by the plaintiff from the third defendant and paid over to the second defendant, even taking account of legal fees that the plaintiff may also be ordered to be paid to the second defendant.  If the contributory negligence claim is successful in its entirety on appeal, such that there is a risk that each of the first, second and third defendants defeat the plaintiff’s claim (and become entitled to their legal costs), the risk of non-recovery of $45,000 is obviously prejudicial but not to the point where that risk outweighs the plaintiff’s present need for immediate funds to meet his needs, in circumstances where he is presently entitled to much more than that amount.  I accept that such a loss may be increased by an inability to recover legal costs, but again, there is an order for the second defendant to pay the plaintiff’s costs and by the grant of the stay, he will be kept out of those funds.  The fixing of such a sum as a condition of the stay is an amount that I consider ultimately achieves the appropriate balance between the parties’ competing interests here.

Orders

30․For the above reasons, the following orders are made:

(1)The judgment given on 26 June 2024 is stayed pending determination of the plaintiff’s appeal and the second defendant’s cross-appeal, on the condition that the second defendant pay to the plaintiff, within 28 days from the date this order comes into effect, the sum of $45,000.

(2)Costs of the application are costs in the cause.

I certify that the preceding thirty [30] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice McWilliam

Associate:

Date: