Dreamtime Supply Company Pty Ltd v Steadfast ICT Security

Dreamtime Supply Company Pty Ltd (the applicant) sought a stay of a judgment from the Supreme Court of the Australian Capital Territory, which ordered it to account to Steadfast ICT Security Pty Ltd (the respondent) for profits in the sum of $1,187,249.64. The applicant also sought an order to pay $200,000 into court as a condition of the stay. The applicant was a fourth defendant in the primary proceedings and was the appellant in a related appeal before the Court of Appeal. The respondent was the plaintiff in the primary proceedings, alleging that the applicant had obtained clients, provided similar services, used confidential information and intellectual property, and profited at the respondent's expense, due to the conduct of other defendants.

The court was required to determine whether to grant a stay of the judgment pending the appeal and, if so, on what conditions. The legal principles governing the grant of a stay were well-established, requiring the applicant to demonstrate a reason to warrant the exercise of discretion in its favour, with the court weighing considerations such as the balance of convenience and competing rights. A significant factor in favour of granting a stay would be a risk that the appeal would prove abortive if a stay were not granted. The court also had to consider the appropriate conditions for any stay, including the payment of money into court or directly to the respondent.

The court acknowledged that the applicant's grounds of appeal were arguable, a concession made by the respondent. The respondent focused its submissions on the conditions of the stay, proposing that the applicant pay the undisputed amount of $110,078.75 directly to the respondent and provide security for costs of $77,000, in addition to a further sum of $500,000 to reflect the judgment amount. The court noted that the onus was on the applicant to disclose its financial position, which it had not done adequately. Following further submissions and a request for instructions, the applicant agreed to pay the $110,078.75 directly to the respondent and offered an additional $30,000, bringing the total to $140,000. The court found this amount reflected the applicant's current capacity to provide funds for the conditions of a stay, particularly in light of recent client losses impacting its trading capacity.

The court ordered that the judgment of 30 August 2021 be stayed, conditional upon the applicant paying $110,000 to the respondent's solicitors within seven days, paying $77,000 into court as security for the respondent's costs of the appeal within seven days, and paying an additional $43,000 into court within seven days. The costs of the application were to be costs in the appeal.