Croucher v Cachia (No 2)

[2015] NSWCA 366

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Croucher v Cachia (No 2) [2015] NSWCA 366
Hearing dates:	On the papers
Date of orders:	26 November 2015
Decision date:	26 November 2015
Before:	Tobias AJA
Decision:	(1)   The judgment of her Honour Judge Norton SC of 18 May 2015 be stayed pending the hearing and determination of the appeal on condition that within seven days there is filed with the Court: (a)   a signed written undertaking to the Court by the applicant in the form contained in the first schedule to these orders; (b)   a signed written undertaking to the Court by Peggy Jeanette Croucher in the form contained in the second schedule to these orders. (2)   Costs of the Notice of Motion are to be costs in the appeal. (3)   Appellant to file and serve written submissions together with the Black Book and Blue Book by 25 November 2015. (4)   Respondent to file and serve his written submissions by 28 December 2015. (5)   Liberty to both parties to apply to the Registrar on 2 days’ written notice to vary the directions referred to in paragraph (3) and (4) above. (6)   Note that the appeal has been fixed for hearing on 2 March 2016.
Catchwords:	PROCEDURE – application for a stay granted subject to undertakings to the Court - form of undertakings
Cases Cited:	Alexander v Cambridge Credit Corporation Limited (1985) 2 NSWLR 685 Kalifair Pty Ltd v Digi-Tech (Australia) Limited (2002) 55 NSWLR 737
Category:	Procedural and other rulings
Parties:	Ronald James Croucher (Appellant) Dennis Peter Cachia (Respondent)
Representation:	Counsel: Ms E Glover (Appellant) Mr McCarthy (Respondent)   Solicitors: Nyman Gibson Miralis Solicitors (Appellant) AC Lawyers (Respondent)
File Number(s):	2015/00164957
Publication restriction:	Nil
Decision under appeal	Court or tribunal: District Court of New South Wales Jurisdiction: Civil Date of Decision: 18 May 2015 Before: Norton SC DCJ File Number(s): 2013/275470

Judgment

1. On 18 May 2015 her Honour Judge Norton SC entered a verdict and judgment in favour of the respondent, the plaintiff in the Court below, in the sum of $236,031.04 plus costs.

2. On 7 August 2015 the applicant filed a Notice of Appeal against that judgment. Thereafter, a Notice of Motion was filed in this Court by the applicant seeking a stay of Norton DCJ’s order. I heard that application on 26 October 2015, and indicated that I would grant the stay sought subject to conditions.

3. The relevant conditions related to a property at Panania jointly owned by the applicant and his wife on the one hand and to a portfolio of shares owned by the applicant on the other. I sought from the applicant, as a condition of granting the stay, that he give an undertaking to the Court that until further order he would not sell or encumber the Panania property or the shares together with a similar undertaking by his wife confined to the property.

4. Apart from ordering that the hearing of the appeal be expedited and that the parties have leave to approach the Registrar for the purpose of obtaining an early date in the new year, the only other order I made on 26 October 2015 was a direction to the applicant to bring in Short Minutes of Order containing the necessary undertakings.

5. In fact the hearing has now been fixed for 2 March 2016 and a timetable has been set for the filing of the necessary appeal papers. However the parties have been unable to agree on the terms of the undertakings to be given by the applicant and his wife. Apart from some minor changes to the undertakings sought by the respondent which I am prepared to accept, a major issue between the parties is that the respondent wishes to add to each of the undertakings of the applicant and his wife the following provision:

“In the event that the appeal referred to in (a) above is dismissed the undertaking referred to in (a) above ensures to the benefit of the Respondent until satisfaction of the judgment and will not merge on final determination or other order as the Court may direct.”

6. The respondent submits that such a provision is supported by the following paragraph from the judgment of the Court in Alexander v Cambridge Credit Corporation Limited (1985) 2 NSWLR 685 at 694-695 where the following was said (omitting citations):

“The Court has a direction whether or not to grant the stay and, if so, as to the terms that would be fair… Where there is a risk that if a stay is granted, the assets of the applicant will be disposed of, the Court may, in the exercise of its discretion, refuse to grant a stay. Sometimes as a condition of the grant of a stay, where funds are available, a court will impose on the applicant the payment of the whole, or part, to the judgment creditor. Even where no order is made for the payment of part of a verdict, it is not at all unusual for the Court, in the exercise of its discretion, to grant a stay on terms that the appellant give to the judgment creditor security in terms defined by the Court as appropriate to the fair adjustment of the rights of the parties… The object of [such an] order [is] clearly, in recognition of the fact that the stay would deprive the judgment creditor of the fruits of the judgment, to protect it and, by the accumulation of interest, to compensate it for the delays in recovery.” (relevant emphasis added)

7. I note that the orders referred to in the last sentence of the above quotation was the payment into a joint account of the solicitors for the parties of a sum equivalent to the interest payable under a disputed mortgage.

8. It was further submitted that there was a precedent for undertakings given to the Court to continue for one month after the Court had delivered final judgment in the appeal. Such an order was made in Kalifair Pty Ltd v Digi‑Tech (Australia) Limited (2002) 55 NSWLR 737.

9. The respondent accepts that there were no reasons given in Kalifair as to why the undertakings were required to survive the judgment of the Court of Appeal by one month. It was suggested that it should be inferred that the purpose of such an order was to avoid any potential for the judgment creditor to dispose of his or her assets an order being made dismissing that party’s appeal.

10. I do not think this is so. The Court in that case refused to require the provision of security for the judgment debt observing (at [33]) that the judgment creditors was not entitled to have conditions imposed for the purpose of increasing the value of its judgment. That was to be protected by a Mareva undertaking which was to be continued until a reasonable time after the determination of the orders. The facts of Kalifair are quite complex and quite dissimilar from those in the current case.

11. The applicant also relied upon Kalifair and, in particular, the following paragraph taken from the headnote with some amendments but which I accept as accurately stating the relevant principle:

“Since a stay would prevent the judgments being enforced while the appeal is pending the Court should endeavour to preserve the status quo by protecting the judgment creditor from the risk of loss. It does this by framing its orders to ensure, as far as practicable, that the existing value of the judgments will still be available to the judgment creditor if the appeal fails.”

12. In the same case the Court also said (at [28]):

“A successful party is prima facie entitled to the fruits of his judgment. He is entitled to be protected, as far as practicable, from the risk that if the appeal fails assets which earlier were available to satisfy the judgment will no longer be available for that purpose. The Court will endeavour to see that a stay does not cause that kind of prejudice to a judgment creditor. An appellant may be required to provide appropriate security as the price of a stay which may make the judgment creditor a secured creditor. Otherwise a requirement for security is only intended to protect the status quo, that is the existing value of the judgment and not to improve the position of the judgment creditor by increasing that value.”

13. Although I accept that in an appropriate case this Court, as a condition of the grant of a stay, may, in its discretion, require an applicant seeking a stay to provide security so as to ensure that the respondent is not deprived of the fruits of the judgment which he or she has obtained, nevertheless there can be no doubt that the purpose of conditioning a stay in the manner proposed in the present case is to ensure that the status quo is maintained in terms of the applicant’s assets available to satisfy any judgment retained by the respondent on the appeal and thus to place the respondent in the same position he would have been in had no stay been granted.

14. Had the stay been refused then although the respondent would have been able to enforce his judgment, nevertheless it would be a matter for the applicant as to whether they made available their assets to satisfy the judgment or whether they otherwise disposed of them. It is noteworthy that the primary judge’s order was dated 18 May 2015 and this Court did not order a stay until 26 October 2015 and that in the meantime there was no suggestion that the applicant had made any attempt to dissipate the assets in respect of which he and his wife are now prepared to give an undertaking that they be preserved.

15. In the circumstances, I see no reason why the respondent should be placed in a more advantageous position than he would have been in had the stay application been refused. Accordingly it follows that the undertakings are only required to be given up to and including the date upon which the Court of Appeal determines the applicant’s appeal subject only to any further order of the Court. In that way the status quo will be maintained and the respondent appropriately protected.

16. This is not a case where the respondent is entitled to a form of security: yet the extension of the undertakings that he seeks would have that effect. I am not prepared to accede to that outcome for it is unnecessary for the purpose of protecting the respondent’s position in ensuring that he is in the same position on the determination of the appeal as he would have been in had no stay been granted.

17. The orders which I will now formally make take into account the amendments proposed by the respondent other than the proposed paragraph (d). I have settled the terms of the written undertakings to be given by each of the applicant and his wife and made them schedules to my orders. As each of the applicant and his wife will be giving written undertakings to the Court, it is unnecessary that those undertakings be given through the applicant’s counsel. It will of course be necessary for the undertakings as I have settled them to be resigned, witnessed and filed with the Court.

18. Accordingly, the formal orders I make are as follows:

1. The judgment of her Honour Judge Norton SC of 18 May 2015 be stayed pending the hearing and determination of the appeal on condition that within seven days there is filed with the Court:

1. a signed written undertaking to the Court by the applicant in the form contained in the first schedule to these orders;

2. a signed written undertaking to the Court by Peggy Jeanette Croucher in the form contained in the second schedule to these orders.

2. Costs of the Notice of Motion are to be costs in the appeal.

3. Appellant to file and serve written submissions together with the Black Book and Blue Book by 25 November 2015.

4. Respondent to file and serve his written submissions by 28 December 2015.

5. Liberty to both parties to apply to the Registrar on 2 days’ written notice to vary the directions referred to in paragraph (3) and (4) above.

6. Note that the appeal has been fixed for hearing on 2 March 2016.

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FIRST SCHEDULE - UNDERTAKINGS

I, Ronald James Croucher undertakes to the Court that:

1. I will not, by myself, by servants or agents, sell, charge, mortgage or otherwise deal with or dispose of my interest (whether held beneficially or otherwise) in the property at 4 Sydney Street, Panania in the State of New South Wales, being the whole of the land or part thereof comprised in Folio Identifier 16/15605 (“Panania Property”) and the shares owned by me listed in the report prepared by Compin Pty Ltd dated 25 June 2015 (annexure “C” to my affidavit sworn 30 September 2015) or any part thereof pending final determination of the appeal commenced by me in the Supreme Court of New South Wales, Court of Appeal by Notice of Appeal filed 7 August 2015 against the judgment of her Honour Judge Norton SC dated 18 May 2015 or until further order.

2. I will submit to such order (if any) as the Court may consider to be just for the payment of damages together with any costs awarded, agreed or assessed to any person, whether or not a party, adversely affected by the operation of the interlocutory order or undertaking or any continuation (with or without variation thereof; and

3. I will pay damages together with any costs awarded, agreed or assessed referred to in (b) to the person there referred to.

SECOND SCHEDULE - UNDERTAKINGS

19. I, Peggy Jeannette Croucher undertakes to the Court that:

20. I will not, by myself, by servants or agents, sell, charge, mortgage or otherwise deal with or dispose of my interest (whether held beneficially or otherwise) in the property at 4 Sydney Street, Panania in the State of New South Wales, being the whole of the land or part thereof comprised in Folio Identifier 16/15605 (“Panania Property”) pending the final determination of the appeal commenced by my husband, Ronald James Croucher in the Supreme Court of New South Wales, Court of Appeal by Notice of Appeal filed 7 August 2015 against the judgment of her Honour Judge Norton SC dated 18 May 2015 or until further order.

Decision last updated: 26 November 2015