Batiste v Lenin
[2002] NSWCA 358
•28 October 2002
CITATION: BATISTE & ORS v LENIN [2002] NSWCA 358 FILE NUMBER(S): CA 40335/02 HEARING DATE(S): 28 October 2002 JUDGMENT DATE:
28 October 2002PARTIES :
Donna Batiste - First Claimant
Hazaran Pty Ltd - Second Claimant
Chrystalis Holdings Pty Ltd - Third Claimant
Michael Petrovic Lenin - OpponentJUDGMENT OF: Sheller JA
LOWER COURT JURISDICTION : Supreme Court - Equity Division LOWER COURT
FILE NUMBER(S) :3548/01 LOWER COURT
JUDICIAL OFFICER :Bergin J
COUNSEL: L J Aitken/J M Baxter - Claimants
M Walton SC - OpponentSOLICITORS: Horowitz Bilinski - Claimants
Phillips Fox - OpponentLEGISLATION CITED: Conveyancing Act 1919 CASES CITED: Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681 DECISION: Application dismissed with costs.
CA 40335/02
ED 3548/01Monday, 28 October 2002SHELLER JA
JUDGMENT
(Application for stay)
1 SHELLER JA: This is an application by notice of motion made to the Court by the claimants, Donna Batiste, Hazaran Pty Limited (Hazaran) and Chrystalis Holdings Pty Limited (Chrystalis), that the judgment of this Court in an appeal in which the claimants were appellants and the opponent, Michael Petrovic Lenin, was the respondent, be stayed pending the hearing and determination of the claimants’ application for special leave to appeal to the High Court. In the alternative, an order is sought for a stay of the execution of the writ of possession granted to the opponent in the matter.
2 The application for special leave to appeal was filed on 25 October 2002. The grounds of the appeal are:-
(b) The Court of Appeal erred in failing to hold that the lessee was entitled to recoup from the rent the amount of over $2,000,000 which the lessee expended in refurbishing the hotel.”
“(a) The Court of Appeal erred in holding that the trial judge was entitled in assessing the Applicants’ application as lessee for relief against forfeiture of its lease to take into account breaches of non-rent covenants notwithstanding that no notice of such breaches pursuant to section 129 of the Conveyancing Act 1919 had been served by the landlord;
3 The decision of this Court from which special leave to appeal is sought was given on 27 September 2002 in the Court which consisted of Giles, Santow JJA and myself and was unanimous in its opinion that the appeal should be dismissed. Their Honours, Giles and Santow JJA, agreed with the reasons for judgment that I published.
4 This application is supported by the affidavit of the claimant, Donna Batiste, who is the sole director and shareholder of the claimant, Hazaran. The affidavit, which I have read, sets out a number of matters which go to the question of whether or not the non-grant of the stay sought would make the application for special leave futile and/or, alternatively, would in the circumstances of that application impose particular hardship on the claimants so that on that basis a stay should be granted.
5 It appears from the material that the premises which are the subject of the lease entered into on 15 November 1996 between the opponent and the claimant, Hazaran, are currently occupied and used in the running of a hotel business. It is that lease which was the subject of the proceedings which were heard at first instance by Bryson J and which gave rise to the appeal that was determined in this Court.
6 It is to be noted as part of the material before me that administrators were relatively recently appointed of the claimant, Hazaran. Upon the basis of that appointment the claimants apparently asserted, or at least Hazaran asserted, that the opponent, Mr Lenin, should be denied possession of the premises.
7 That claim gave rise to proceedings which came before Bergin J as the Duty Judge in the Equity Division. After hearing the matter, her Honour on 4 October 2002 declared that the plaintiff, that is to say, the opponent, Mr Lenin, was entitled to take possession of the premises which were therein described. At the same time the Court granted leave to Mr Lenin to have a writ of possession issued forthwith pursuant to orders that had been made by Bryson J on 12 April 2002. However, her Honour ordered that the writ of possession lie in the office of the Registry until 31 October 2002. I observe to that extent the claimants have been granted an indulgence by the Court in relation to the writ of possession.
8 In her affidavit, Ms Batiste says that the claimants Hazaran and Chrystalis and the hotel business, The Great Northern Hotel (Newcastle) Pty Ltd and another business known as Surf City, which is apparently a night club, will cease to trade if the hotel has to close on 31 October 2002 prior to the hearing and determination of an application for relief by a lender, Provident Capital Limited (Provident Capital).
9 When this appeal came before this Court there was also listed for hearing an appeal or an application for leave to appeal by Provident Capital, which was apparently a creditor of Hazaran, as a result of loans made to that company and also a mortgagee or chargee over assets of that company.
10 The application by Provident Capital which led to the application in this Court was in substance for relief against forfeiture. The application to this Court arose out of Bryson J’s refusal to entertain that application in these proceedings.
11 When the matter came on in this Court after some debate a document was handed up which was described as a consent document. Under that document, which was signed by counsel for Provident Capital and also by counsel for Mr Lenin and which was dated 5 September 2002, Mr Lenin gave a number of undertakings which, as I understand it, were intended to protect Provident Capital during such time as it needed to bring forward its separate application as mortgagee or chargee for relief against forfeiture.
12 Two things should be noted about that. Firstly, that those undertakings seem, in part at least, on their face to give some protection also to Hazaran but that apart and whether that is how they should be read, about which I say nothing, those proceedings have been brought forward and have been listed before Palmer J in the Equity Division. I have been told from the bar table that they will not be reached for hearing until some date in December and then, indeed, may not be heard until early in the new year.
13 Ms Batiste in her affidavit also refers to the fact that there is upon the premises a significant amount of property, by that I understand the reference being to fixtures and other personal property, which belongs either to Provident Capital, The Great Northern Hotel, Hazaran, Chrystalis or Ms Batiste. There is evidence about some further time needed to remove that property and Ms Batiste was cross-examined about the extent to which since the decision of this Court steps have been taken to remove that property.
14 However all that may be, it seems to me that if this is no more than an application for an extension of time for the issue of the writ of execution that is a matter more properly pursued in the Equity Division perhaps again before Bergin J. By saying that I do not intend to suggest that that particular application has any particular merit or should succeed. However, I do not think it is a matter to which I should turn my attention beyond background material.
15 In substance, I take notice of, having read, the material that Ms Batiste refers to. One other matter which is referred to is a licensing application which is apparently current in the Licensing Court.
16 In Jennings Construction Limited v Burgundy Royale Investments Pty Limited (1986) 161 CLR 681 his Honour, Brennan J, considered an application for a stay pending an application for special leave to appeal in the High Court.
17 It is abundantly plain from that decision that it is entirely appropriate that the current application for a stay of the decision of this Court should be heard in this Court and no point is taken about that.
18 However, Brennan J spoke about the matters that should be taken into account in such an application. At 683 his Honour said:
- “The jurisdiction to grant a stay in the present case depends on whether a stay is necessary to preserve the subject matter of the litigation. If an application for special leave to appeal would be futile unless a stay is granted, the jurisdiction arises.”
At 684 his Honour said:
- “A stay to preserve the subject-matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted. If an order for a stay is made, the respondent is kept out of the benefit of the order of the court in which the matter is pending until the hearing of the application for special leave to appeal.”
- “In exercising the extraordinary jurisdiction to stay, the following factors are material to the exercise of this Court’s [and, of course, his Honour was there referring to the High Court] discretion. In each case when the Court is satisfied a stay is required to preserve the subject-matter of the litigation, it is relevant to consider: first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies.”
19 In approaching the application before the Court today I accept what Brennan J said as the appropriate guidance to be taken.
20 It is, of course, argued on behalf of the claimants that a stay is necessary to preserve the subject matter of the litigation. I am prepared to an extent to accept that is so, though it must be borne in mind that the claimants urge that if Provident Capital succeeds in its application for relief against forfeiture the claimants should in some way, which I do not fully understand, enjoy some consequence from that. However, those proceedings are a factor to be borne in mind as, indeed, is the undertaking which has already been given by Mr Lenin.
21 For present purposes I accept that if this stay is not granted the application for special leave may be futile. However, it is of particular significance that the grant of a stay delays further payment of past rent and outgoings made by the lessor. Further, on the material before me there is at this time outstanding on account of rent, outgoings and interest an amount in excess of $800,000 owing by the lessee, Hazaran, to Mr Lenin.
22 It is true that there is some material to suggest that since April of this year rent has been paid on behalf of the lessee by Provident Capital and some suggestion that Provident Capital will pay future rent at least until a resolution of its application for relief against forfeiture.
23 However, there is no material put before me to suggest that that substantial debt of $800,000 owing for the occupation of the premises in part from the inception of the lease and intermittently thereafter is to be paid as a condition of the grant of a further stay. I regard this as a matter of considerable significance.
24 While it is true that part of the argument that the claimants wish to put in the High Court may have an effect upon the amount that is due if the argument is successful, I can really see no just ground for further delaying a payment due for the lessees’ occupation of these premises over several years.
25 I turn to the question of whether there is a substantial prospect that special leave to appeal will be granted. I do not regard ground 2 in the application to have any substantial prospect of success in terms of a special leave application.
26 So far as the first ground is concerned it is true that it raises a question about the application of s129 of the Conveyancing Act which, so far as I am aware, has not been passed upon by the High Court. To that extent it may be said to raise a matter of general importance. However, again I am not persuaded that it has any substantial prospect of success, particularly bearing in mind the factual circumstances of these proceedings and particularly bearing in mind the very substantial amount owing by the lessee to Mr Lenin for rent, outgoings and interest.
27 I am satisfied that the grant of a stay would cause substantial loss to Mr Lenin. If, as it seems to me likely, Mr Lenin is ultimately successful he is again kept out for a considerable period of time from the amount owing to him and interest thereon. I have been informed from the bar table that the special leave application is unlikely to come on for hearing before March or April of next year.
28 In my opinion, in all the circumstances of the case and having paid attention to the matters advanced on behalf of the claimants, both in evidence and in submissions from the bar table, this is not a case in which this Court should exercise what Brennan J described as the extraordinary jurisdiction to grant a stay of judgment.
29 Accordingly, in my opinion, the application should be dismissed with costs and I so order.
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