Bendigo and Adelaide Bank Ltd v Karamihos

Bendigo and Adelaide Bank Ltd (the applicant) sought a stay of certain orders made by the Equity Division of the Supreme Court of New South Wales, pending the determination of its appeal. The respondents owned property subject to a mortgage in favour of the applicant. The impugned orders would permit the respondents to deal with or dispose of this property, potentially jeopardising the applicant's security if the appeal were successful. The applicant had sought undertakings from the respondents regarding the property, but none were given.

The primary legal issues before the court were whether to grant a stay of the substantive orders concerning the respondents' property and whether to stay the orders for costs made in the courts below. The applicant argued that allowing the respondents to deal with the property posed a significant risk to its security, as no undertakings had been provided to mitigate this risk. Regarding costs, the applicant raised concerns about the recoverability of costs if the appeal succeeded, noting the absence of an undertaking for their repayment.

Basten JA considered the balance of convenience and the potential prejudice to each party. His Honour noted that the disadvantage to the respondents from a stay of the substantive orders was largely theoretical, as they had not indicated any immediate intention to deal with the property. Conversely, the applicant faced a real risk of losing its security. In relation to costs, the court acknowledged the risk of unrecoverable costs but allowed the respondents to proceed with their costs assessment, provided they were so advised, without prejudice to the applicant's rights.

The court ordered that the substantive orders be stayed to the extent that they enabled the respondents to demand a discharge of mortgage or to sell, mortgage, or otherwise deal with their Maroubra property, pending the determination of the appeal or further order. Orders concerning costs were also stayed, without prejudice to the respondents' ability to proceed with their costs assessment. The appeal was granted procedural expedition, with an expectation of being heard within four months. Costs of the motion were to be costs in the appeal.