Dyer v Chrysanthou (No 4)

Case [2022] FCA 51

FEDERAL COURT OF AUSTRALIA

Dyer v Chrysanthou (No 4) [2022] FCA 51  

File number: NSD 426 of 2021
Judgment of: WIGNEY J
Date of judgment: 2 February 2022
Date of publication of reasons: 11 February 2022
Catchwords: COSTS – respondents’ interlocutory applications for the stay of Registrar’s costs judgment until the determination of appeal proceedings – where insufficient evidence of applicant’s financial capacity – where paucity of evidence of strength of grounds of appeal – where no notice of appeal filed regarding Registrar’s costs order – where some risk of applicant’s inability to meet costs judgment if appeal successful – where undertakings to hold funds in trust agreed in principle – stay applications partially allowed
Legislation:

Federal Court of Australia Act 1976 (Cth), ss 35A(5), 37M

Federal Court Rules 2011 (Cth), rr 3.11, 36.08, 41.03
Cases cited:

Dyer v Chrysanthou (No 2) (Injunction) [2021] FCA 641

Dyer v Chrysanthou (No 3) (Costs) [2021] FCA 642

Porter v Dyer [2021] FCA 1459

Dyer v Chrysanthou [2021] FCA 578

Urban Alley Brewery Pty Ltd v La Sirène Pty Ltd (No 2) [2020] FCA 351

Viagogo AG v ACCC [2021] FCA 175

Guildford International Group Pty Ltd, in the matter of Aviation 3030 Pty Ltd, Re v Aviation 3030 Pty Ltd [2018] FCA 600
Division: General Division
Registry: New South Wales
National Practice Area: Other Federal Jurisdiction
Number of paragraphs: 49
Date of hearing: 2 February 2022
Counsel for the Applicant: Ms A Cameron
Solicitor for the Applicant: Marque Lawyers
Counsel for the First and Second Respondents: Mr C O’Neill
Solicitor for the First Respondent: Kennedys
Solicitor for the Second Respondent: Company Giles

ORDERS

NSD 426 of 2021
BETWEEN:

JOANNE ELIZABETH DYER

Applicant
AND:

SUE CHRYSANTHOU SC

First Respondent

CHARLES CHRISTIAN PORTER

Second Respondent

ORDER MADE BY:

WIGNEY J

DATE OF ORDER:

2 FEBRUARY 2022

THE COURT ORDERS THAT:

1.The orders made by Thawley J on 11 June 2021 and Registrar Luxton on 19 January 2022, the effect of which is to require the respondents to pay costs assessed on a lump sum basis in the amount of $430,200.00, be temporarily stayed pending the outcome of the appeal and cross-appeal filed by the respondents in respect of the judgments and orders of Thawley J (appeal proceeding NSD612/2021), subject to the following conditions:

(a)the sum of $430,200.00 is to be paid into a trust account of the first respondent’s solicitors, Kennedys, by 4.00pm on 4 February 2022; and

(b)subject to any further order of the Court, Kennedys are not to release those funds from the trust account before 5.00pm on the day of the delivery of judgment in the appeal proceeding NSD612/2021; and

(c)if the appeal proceeding:

(i)is resolved in favour of the applicant, the funds are to be paid to, or at the direction of, the applicant within 48 hours of the time referred to in order 1(b); or

(ii)is resolved in favour of the respondents, the funds may be paid to, or at the direction of, the respondents; or

(iii)does not resolve…

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AGLC
Dyer v Chrysanthou (No 4) [2022] FCA 51
Case
[2022] FCA 51
Decision Date

CaseChat Overview and Summary

The case of Dyer v Chrysanthou (No 4) involves interlocutory applications by the respondents for a stay of the Registrar’s costs judgment until the determination of the appeal proceedings. The parties are engaged in a legal dispute, with the applicants seeking a temporary halt on the enforcement of a costs judgment pending the resolution of their appeal. The Federal Court was tasked with deciding whether to grant a stay of execution of the costs judgment under Rules 36.08 and 41.03 of the Federal Court Rules.

The court had to consider two primary issues. First, whether there was an arguable point on appeal that would provide a rational prospect of success on the grounds presented. Second, whether the balance of convenience favoured granting a stay, meaning if the applicants would suffer significant prejudice or damage if the stay was not granted and this would not be remedied by a successful appeal. The court also had to assess the applicants' financial capacity to meet the costs judgment if the appeal were to be unsuccessful.

The Federal Court found that while the applicants had not demonstrated an exceptional strength of grounds for their appeal, they had shown a reasonable prospect of success on some grounds. The court recognised the risk of the applicants being unable to meet the costs judgment if the appeal were successful, particularly given the applicants' limited financial resources. The court also noted that the applicants had agreed in principle to hold the funds in trust, which was a factor in favour of granting the stay. Therefore, the court partially allowed the stay applications, imposing conditions to safeguard the applicants' financial situation and the enforcement of the costs judgment.

The court ordered that the Registrar’s costs judgment be temporarily stayed, subject to the applicants paying the sum of $430,200.00 into a trust account by a specified date. The funds were to remain in the trust account until the appeal was resolved. If the appeal was successful for the applicants, the funds would be paid to them; if unsuccessful, they would be paid to the other party. The respondents were also ordered to pay the applicants' costs of the interlocutory applications.

Orders

Orders of the court

1. The orders made by Thawley J on 11 June 2021 and Registrar Luxton on 19 January 2022, the effect of which is to require the respondents to pay costs assessed on a lump sum basis in the amount of $430,200.00, be temporarily stayed pending the outcome of the appeal and cross-appeal filed by the respondents in respect of the judgments and orders of Thawley J (appeal proceeding NSD612/2021), subject to the following conditions:

(a) the sum of $430,200.00 is to be paid into a trust account of the first respondent’s solicitors, Kennedys, by 4.00pm on 4 February 2022; and

(b) subject to any further order of the Court, Kennedys are not to release those funds from the trust account before 5.00pm on the day of the delivery of judgment in the appeal proceeding NSD612/2021; and

(c) if the appeal proceeding:

(i) is resolved in favour of the applicant, the funds are to be paid to, or at the direction of, the applicant within 48 hours of the time referred to in order 1(b); or

(ii) is resolved in favour of the respondents, the funds may be paid to, or at the direction of, the respondents; or

(iii) does not resolve the question of costs wholly in favour of any of the parties, the funds are to be paid or released in accordance with the orders of the Court or as agreed between the parties.

2. The respondents pay the applicant’s costs of the respondents’ interlocutory applications heard on 2 February 2022.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Rule 36.08 of the Rules provides as follows:36.08 Stay of execution or proceedings under judgment appealed from(1) An appeal does not:(a)operate as a stay of execution or a stay of any proceedings under the judgment subject to the appeal; or(b)invalidate any proceedings already taken.(2)However, an appellant or interested person may apply to the Court for an order to stay the execution of the proceeding until the appeal is heard and determined.(3)An application may be made under subrule (2) even though the court from which the appeal is brought has previously refused an application of a similar kind. Similarly, r 41.03 of the Rules provides that “a party bound by a judgment or order may apply to the Court for an order that the judgment or order be stayed”. The principles upon which a stay of execution or stay of orders may be granted pursuant to r 36.08 of the Rules were helpfully summarised in a recent judgment of Abraham J in Viagogo AG v ACCC [2021] FCA 175 (at [10]-[12]):Rule 36.08 confers a broad discretion. Generally, there must be demonstrated “a reason or an appropriate case” to warrant the exercise of discretion in favour of granting a stay. It is not necessary to establish special or exceptional circumstances for the grant of a stay: Powerflex Services Pty Ltd v Data Access Corp (1996) 67 FCR 65 at 66.Two questions must be considered: first, is there an arguable point on the proposed appeal: Nolten v Groeneveld Australia Pty Ltd [2011] FCA 1494 (Nolten) at [24] or some “rational prospect of success” in relation to any of the grounds of appeal: Burns v AMP Finance Ltd [2005] FCA 761 at [5]; and second, does the balance of convenience favour the grant of a stay: Nolten at [24], [46]. The party seeking the order bears the onus of demonstrating a proper basis for a stay, which must be fair to all parties: Alexander v Cambridge Credit Corporation Ltd (receivers appointed) (1985) 2 NSWLR 685 (Alexander) at 695. That party must demonstrate that there is a real risk that it will suffer prejudice or damage if a stay is not granted, which will not be redressed by a successful appeal: Kalifair Pty Ltd v Digi-Tech (Australia) Ltd, McLean Tecnic Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 (Kalifair) at [18]; Flight Centre Limited v Australian Competition and Consumer Commission [2014] FCA 658 (Flight Centre) at [9(f)]. This requirement will be satisfied if a successful appeal will be rendered nugatory unless a stay is granted: Ali v Australian Competition and Consumer Commission [2020] FCA 860 at [11]; Australian Competition and Consumer Commission v BMW (Australia) Ltd (No 2) [2003] FCA 864 (BMW) at [5]; Alexander at 695; Kalifair at [18]. Similar principles have been referred to and applied in relation to the discretion in r 41.03 of the Rules: see Urban Alley Brewery Pty Ltd v La Sirène Pty Ltd (No 2) [2020] FCA 351 at [48]-[51]. Mr Porter’s interlocutory application was supported by an affidavit sworn by his solicitor, Ms Rebekah Giles. Similarly, Ms Chrysanthou’s interlocutory application was supported by an affidavit affirmed by her solicitor, Mr Nathan Buck.

Ratio Decidendi

Legal Principle Established

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