Dreamtime Supply Company Pty Ltd v Steadfast ICT Security

[2021] ACTCA 38

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL

Case Title:

Dreamtime Supply Company Pty Ltd v Steadfast ICT Security

Citation:

[2021] ACTCA 38

Hearing Date:

17 November 2021

DecisionDate:

17 November 2021

Before:

Elkaim ACJ

Decision:

See [18]

Catchwords:

APPEAL – APPEAL FROM SUPREME COURT – Application – stay of judgment – conditions of stay

Cases Cited:

Alexander v Cambridge Credit Corporation (1985) 2 NSWLR 685
Kalifair v Digitech Australia Pty Ltd [2002] NSWCA 383; 55 NSWLR 737
Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199

Parties:

Dreamtime Supply Company Pty Ltd ( Appellant)

Steadfast ICT Security Pty Ltd ( Respondent)

Representation:

Counsel

P Walker SC ( Appellant)

E Cox SC and A Munro ( Respondent)

Solicitors

Bradley Allen Love Lawyers ( Appellant)

Mackenzie Workplace Law ( Respondent)

File Number:

ACTCA 45 of 2021

Decision under appeal: 

Court:  ACT Supreme Court

Before:  Mossop J

Date of Decision:          30 August 2021

Case Title:  Steadfast ICT Security Pty Ltd v Peak

Citation: [2021] ACTSC 199

ELKAIM ACJ:

1. On 30 August 2021 Mossop J made the following order:

Order that Dreamtime Supply Company Pty Ltd account to Steadfast ICT Security Pty Ltd for profits in equity in the sum of $1,187,249.64.

1. By an application in proceeding, filed on 26 October 2021, the applicant (‘Dreamtime’) wishes to have the above order stayed. It also seeks an order that it pay $200,000 into court within 48 hours. The latter order, although styled differently, is essentially proposed as a condition of the stay.

1. The above order made by Mossop J is ‘Order 1’ in Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199. The applicant here was the fourth defendant in that litigation. It is also the appellant in an appeal from this decision (Proceedings No ACTCA 45 of 2021).

1. The applicant originally relied on the following affidavits: Christopher John Goldsmith, affirmed on 26 October 2021 and Ian Alexander Meagher, sworn on 16 November 2021. In addition the applicant relies on a letter dated 27 October 2021 from the respondent’s solicitor to the applicant’s solicitor.

1. The respondent relied on an affidavit of Ms Deborah Joy McKenzie sworn on 16 November 2021.

1. The respondent was the plaintiff in the primary proceedings. It’s claim against the applicant was described at [6] of the judgment:

In relation to the fourth defendant, Dreamtime, the plaintiff alleges that there was an outsourcing agreement in relation to particular IT services which Dreamtime obtained by participating in the Australian government’s Indigenous Procurement Policy (IPP). It is alleged that by reason of the conduct of Mr Peak, Mr Watt, Mr Stefanovic and Mr Glavonjic, Dreamtime has:

(a)obtained the clients, customers and/or suppliers of the plaintiff                  

(b)provided services of a similar nature to those provided by the plaintiff;

(c)obtained and used the plaintiff’s confidential information;

(d)obtained and used the plaintiff’s intellectual property;

(e)profited or been unjustly enriched at the expense of the plaintiff; and

(f)had the use and benefit of the first, second and third defendants’ services in breach of their contracts of employment.

1. The substantive proceedings are awaiting hearing in the Court of Appeal. It is evident from the amended notice of appeal that the applicant does not dispute that it owes the respondent $110,078.75.

1. 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”.

1. The applicant made submissions on the nature of the appeal and, effectively, the strength of its grounds. The respondent conceded that the applicant’s grounds were arguable, although perhaps, to more accurately reflect the submissions, barely arguable.

1. In the light of the concession I do not see it as necessary to go beyond an acceptance that the appeal is not entirely without merit.

1. The respondent concentrated its submissions on the conditions of a stay, rather than the granting of a stay. It said that the conceded $110,078.75 should be paid directly to it and that an amount of $77,000, by way of security for costs should be paid into court. The $200,000 contemplated by the applicant would have a small amount left over. However the respondent further said that an amount of $500,000 should also be paid to the court to properly reflect the extent of the judgment that had been made in its favour.

1. The respondent pointed out that the onus in a stay application is on the applicant and that this applicant had not disclosed, other than in the barest terms, its financial position. The response to this point was that until very recently the respondent had asserted that the applicant was a company of very few assets and therefore there was no need to provide better information. I found this response somewhat circular and one which ignored the location of the onus.

1. I asked the applicant to obtain instructions on two matters; firstly whether it would object to paying the $110,078.75 directly to the respondent and secondly whether it could pay into court an amount greater than that encompassed within the global ‘offer’ of $200,000.

1. Following an adjournment, I was informed that the applicant was content to pay the  $110,078.75 directly to the respondent. I was also told that an extra $30,000 could be obtained. In order to substantiate the limits of this amount a further affidavit of Mr Goldsmith, sworn today, was put before me.

1. The respondent did not object to the affidavit. It pointed out that the financial figures indicated a level of trade which would justify the $500,000 referred to above being paid over a period of time.

1. In my view if a stay is to be granted it should be on conditions that can be met immediately. Mr Goldsmith’s affidavit indicates that since the judgment a number of the applicant’s clients have been lost. If this were to continue then the applicant’s capacity to trade would be further impeded.

1. While I would normally have considered that the stay demanded payment of a greater amount, I am satisfied that the amount offered reflects the applicant’s current capacity to provide funds to satisfy conditions of a stay. For convenience, I will round off the figures.

1. I make the following orders:

1.    Order 1 in the decision of Mossop J made on 30 August 2021 is stayed.

2.    The stay is conditional upon the following:

i.The applicant is to pay to the solicitors for the respondent the sum of $110,000 within seven days of the date of these orders.

ii.The applicant is to pay the sum of $77,000 into court within seven days of the date of these orders, this sum to represent security for the respondent’s costs in the appeal.

iii.The applicant is to pay an additional sum of $43,000 into court within seven days of the date of these orders.

3.    Costs of the application are to be costs in the appeal.

I certify that the preceding eighteen [18] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Chief Justice Elkaim

Associate:

Date: 17 November 2021