Bartley & Anor v Myers & Ors (No 2) No. Scciv-00-978

BARTLEY & ANOR V MYERS & ORS (NO. 2)
[2001] SASC 235
Application for Leave to Appeal (ex tempore)

LANDER J: . This is an application for leave to appeal from a decision which I gave on 25 June 2001, and a separate application for an order staying the execution of a judgment of a District Court Judge made on 28 September 2000.
The judgment which I gave on 25 June 2001 was in response to two applications made by the applicants. The applicants were the unsuccessful parties in a trial before the District Court Judge. In those proceedings the first respondent obtained judgment against the applicants in the sum of $101,753. Judgment was entered on 28 September 2000. The applicants filed a notice of appeal on 12 October 2000. The appeal lies as of right.
The first and second respondents have lodged a cross appeal seeking an increase in the amount of damages awarded. They have also sought variations for cost orders which are not important. The applicants were apparently insured with FAI General Insurance Co. Ltd, which was a subsidiary of HIH. FAI went into provisional liquidation on 28 March 2001.
In December 2000 FAI offered to pay the judgment sum pending the outcome of the appeal by payment of $15,000 to the first respondent, and by payment of the balance into the Supreme Court. An order was made to allow that to occur. Unfortunately before that happened FAI went into provisional liquidation.
The appeal should have been set down at the very latest by 12 April 2000. It was not, and as a result it lapsed pursuant to the provisions of Rule 95.11.
The previous application to me was for two orders. First, an order extending the time within which to set down the appeal; secondly, for an order staying the execution on the judgment until the hearing of the appeal.
On 25 June 2001 I published reasons for concluding that the extension of time ought to be allowed, but the stay refused. The applicants now seek leave to appeal for my refusal to grant a stay. I observed in my earlier reasons that if I refused a stay, the first respondent would be entitled to proceed to execute on the judgment pending the appeal. In those circumstances, I said the applicants would be entitled to seek whatever indemnity to which they were entitled under the Government assistance scheme relating to HIH.
These present applications are supported by an affidavit of Peter Heinrich, solicitor for the applicants, who has deposed that since I made those orders he has been in contact with HIH Claims Support Pty Ltd, and spoken to Mr Gilley, the operations manager. He says that he has been told by Mr Gilley that it will be more than one month before any HIH policy holders receive any payment pursuant to the Commonwealth Government Financial Assistance Scheme, and it may be several months before such payments become available.
Mr Heinrich has also deposed that he contacted QBE Insurance Australia Ltd, because he had been told by Mr Gilley that QBE might well be appointed to manage the claims. He had a conversation with Mr Reynolds of QBE, who advised him that QBE will probably be contracted to manage claims, and that it is currently considering various proposals for establishing a claims operation to manage those claims.
It is proposed no doubt, if leave was granted, to use this affidavit on the appeal as well as using it on these applications. The purpose of the affidavit is no doubt to demonstrate that a matter which I assumed would occur will not occur within the timeframe. It will also be used no doubt to establish that the applicants will be seriously disadvantaged if a stay is not granted.
Leave to appeal is required because the decision is interlocutory: rule 94.01.
Leave will not be granted for appeals from interlocutory orders except where there are questions of general principle or importance to the parties, where there is some doubt about the decision and a substantial injustice might occur if the decision was allowed to stand without challenge.
In the end result as in all cases of this kind, the question is whether the interests of justice require leave to be granted. I can approach the resolution of this application for leave to appeal without deciding whether the applicants have raised any questions of general importance or principle.
I think the application for leave to appeal has to be refused for practical reasons. If I was to grant leave and make no further order for a stay in the meantime, the grant of leave would be otiose. It would have no effect because the appeal from my decision to refuse a stay, would be heard at the same time as the appeal itself and the applicants would not have achieved what they have sought to achieve, which is a stay pending the appeal. In practical terms it would mean that the appeal would never be heard because the order appealed from is an order refusing a stay pending the appeal.
If the Full court after hearing argument is of the opinion that the appeal is likely to succeed and wish to reserve its judgment, no doubt the Full Court would grant a stay at that time. If an ex tempore decision was given in the Full Court, whatever the result no stay would be required.
If on the other hand I was to grant leave and make an order for a stay pending the appeal, then that would frustrate the order that I previously made. It would mean a reversal of the previous order because the previous order refused a stay pending appeal. In those circumstances again the appeal would not be heard, because if I acceded to an application for leave to appeal and made an order for a stay at the same time, the applicants would have achieved that which I have held previously they should be denied. In those circumstances, there would be no point in the Full Court hearing an appeal from my refusal to grant a stay in circumstances where I later granted a stay.
It follows that there is no point in my opinion in granting leave to appeal from my earlier decision.
That however is not an end to the matter. As I have said there are two applications before me, the second is simply for a stay of execution. The applicants are entitled to make a second application because as I have already said, my previous decision was interlocutory. They are entitled to rely upon the further information which has been provided in the affidavit of Mr Heinrich. They are also entitled to rely upon the information which was previously before me.
The applicants say that there are two matters which need to be considered on this further application. First, that the further information to which I have referred, which shows that the applicants will suffer a serious disadvantage if the stay is not granted. That is a serious disadvantage which I assumed on my previous decision would not be suffered. The second matter is that the applicants have, on this application, brought to my attention clause 5.2 of the Deed which obliges the first respondent to pay her former solicitors something in the order of $86,000 in addition to the costs she has already paid them.
On the previous application I assumed that if the appeal was reinstated which it was, that obligation would be imposed upon the first respondent immediately. It has been pointed out to me by Mr Anderson QC who has appeared on this application, that the first respondent is not obliged to pay the balance of the outstanding sum owing to her solicitors until 30 days after determination of the appeal, and/or the cross-appeal, either by the appeal and/or the cross-appeal being discontinued, or by the Full Court ruling on the appeal and/or the cross-appeal. It has been submitted that I wrongly assumed that there was a present obligation on the first respondent to make the outstanding payment to her solicitors. Mr Anderson argued that there is no present obligation and no obligation arises now that the appeal and cross-appeal has been reinstated by my previous order, until 30 days after the events to which I have referred.
In my previous reasons I said the following:
“One of the parties will be disadvantaged by either the granting of a stay or the refusal to grant a stay. One of the parties will suffer hardship and in particular, financial hardship. In my opinion it would not be appropriate to require the first respondent to suffer any further financial hardship, even though the refusal of a grant of stay will require the applicants to suffer financial hardship. If I refuse a stay then the first respondent will be entitled to proceed to execute on the judgment. In those circumstances the applicants will be entitled to seek whatever indemnity to which they are entitled under the government assistance scheme relating to HIH.”
Mr Anderson has submitted, that whilst that line of reasoning was right, there are two circumstances which invalidate the result. First as I have said, the further information relating to the availability of the HIH funds. Secondly an incorrect assumption on my part that the first respondent had an immediate obligation to pay her solicitors the sum of $86,000 whereas that obligation does not arise until 30 days after the events to which I have referred.
Mr Anderson says in those circumstances, in weighing the respective interests of the parties and in doing justice, I should now grant a stay until the appeal can be heard.
I interrupted the hearing of this application to speak to the Appeals Clerk, who has advised me that if the appeal is set down either this week or early next week, which it has to be if there is to be compliance with my previous order, the appeal can be heard in August. The parties have advised me that they can proceed in August.
It seems to follow from what has been put to me today, that if I refuse the application for a stay, in the light of the material before me, it is likely that proceedings will be taken to bankrupt the first appellant and to wind up the second appellant. That would cause both the first and second appellants irretrievable hardship. On the other hand if I refuse a stay and some part of the monies are paid, the monies will be used only I think, for the discharge of the first respondent’s obligations to her solicitors, which are not present obligations and which I should add, are not obligations which carry interest.
If on the other hand I grant a stay the first respondent’s position will remain the same, she will have a postponed obligation to her solicitors in respect of the $86,000 and no immediate obligation. In those circumstances I have reconsidered my previous ruling and have reached the conclusion that it would now be appropriate to grant a stay of execution until the matter is heard in August.
However, I will grant that stay only upon terms which include the undertaking given in para.16 of Mr Bartley’s affidavit of 5 June 2001, in the following terms:
“An undertaking is given by Mr Bartley and the second appellant to not sell, give or otherwise dispose of any assets in which either appellants have a legal or beneficial interest, except:
(i)     in the ordinary course of day to day business, or
(ii)   in the ordinary course of day to day living expenses, including the living expenses of the dependants or the first appellant; or
(iii) for the purpose of discharging or servicing all debts, liabilities, including liabilities under guarantees present or contingent; or
(iv)   for the purpose of any legal expenses.
Aincidental to these proceedings, or
Bin relation to any appeal of this action including, but not limited to, any cross appeal or ground of contention; or
Cincidental to proceedings in the District Court of South Australia Action 1276 of 1998 and Action 742 of 2001 in this court.”
Upon that undertaking, which Mr Anderson has proffered on behalf of the first and second appellants, I am prepared to make an order staying execution of the judgment sum until the hearing of the appeal on 13 August 2001.

[2001] SASC 235

5 July 2001