Eckert v Roberts - [2018] SASCFC 21

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Application)
ECKERT v ROBERTS
[2018] SASCFC 21
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Stanley and The Honourable Justice Nicholson)
6 April 2018
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - STAY OF PROCEEDINGS
HIGH COURT AND FEDERAL COURT - HIGH COURT OF AUSTRALIA - APPELLATE JURISDICTION - PROCEDURE - STAY OF PROCEEDINGS
Application for stay of execution of order to vacate and hand over possession of farming land pending the determination of an application for special leave to appeal to the High Court.
Held: Application refused, short interim stay granted to facilitate the bringing of a stay application in the High Court.
Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) [1986] HCA 84, (1986) 161 CLR 681; Fox v Percy [2003] HCA 22, (2003) 214 CLR 118, considered.

ECKERT v ROBERTS
[2018] SASCFC 21
Full Court: Kourakis CJ, Stanley and Nicholson JJ
THE COURT

On 22 December 2017, this Court dismissed an appeal by the applicant[1] from a trial judgment by Hinton J of this Court[2] delivered on 20 December 2016[3] in favour of the respondent. A fundamental matter in issue between the parties was the question of the equitable ownership of certain farming land (“the land”) which the applicant has occupied from about 1983, first as owner but in the latter years as the respondent’s tenant. The question of ownership was determined at trial and on appeal in favour of the respondent.
[1]    Eckert v Roberts [2017] SASC 176.
[2]    Roberts v Eckert [2016] SASC 197.
[3]    Hinton J delivered reasons for judgment on 20 December 2016 and entered formal orders on 3 February 2017.
On 2 February 2018, this Court made a suite of orders consequential on the Full Court’s judgment and with the consent of the parties. Those orders were intended, inter alia, to permit the applicant to continue to occupy the land and to farm it until shortly after the respondent had completed the 2018 harvest of grapes being grown on the land. Notwithstanding that the respondent was to remain out of possession during this period, the orders made provision for him to enter upon the land for various purposes, including the harvesting of the grapes.
Order 1 provided to the effect that the applicant was to give the respondent possession of the land:
By 5pm on the date being 14 days after the date that the [respondent] notifies in writing to the [applicant] as being the date upon which the [respondent] has completed the 2018 harvest of the grapes grown on the grapevines on the land (“the date for possession”).
By an undated letter, acknowledged by the applicant to have been received late in the afternoon of Thursday 29 March 2018, the solicitors for the respondent notified the solicitors for the applicant that the harvest of the grape crop had been completed and that, in accordance with the orders made on 2 February 2018, the respondent required the applicant to give up possession of the land by no later than 3pm on Thursday 12 April 2018. The applicant concedes that, at the time he received the letter, the harvest of the grape crop had been completed and that, by reference to the Court’s order, he is obliged to vacate the land on or before 12 April 2018.
On 7 March 2018, the applicant filed with the High Court of Australia, an application for special leave to appeal from this Court’s dismissal of the applicant’s appeal from the judgment of Hinton J. The applicant wishes to remain on the farm until his appeal rights in the High Court have been determined and notwithstanding the requirement to vacate the farm by 12 April 2018 in accordance with this Court’s orders. By an amended interlocutory application filed in this Court on 4 April 2018 (FDN 54)[4] the applicant has sought the following orders.
[4]    An initial interlocutory application (FDN 50) seeking a more limited form of relief was filed on 28 March 2018.
1.That this application be made returnable before the Full Court at 2.15 pm Thursday the 5^th April 2018;
2.
2.1 Pending the determination of the [applicant’s] application for special leave to appeal to the High Court of Australia in Action A10 of 2018, and if special leave is granted, the determination of any consequent appeal, an injunction issue and the respondent be enjoined from selling, mortgaging, encumbering or otherwise dealing with the land described in paragraph 1 of the judgment of the Honourable Justice Hinton delivered on 20 December 2016 ([2016] SASC 197).
2.2    There be a stay of execution of paragraph 1 of the Orders made by this Honourable Court on 2 February 2018 until the determination of the [applicant’s] application for special leave to appeal to the High Court of Australia in Action A10 of 2018, and if special leave is granted, until the determination of any consequent appeal.
2.3    Alternatively, in the event that this Honourable Court does not make the orders in paragraph 2.1 or 2.2 above, paragraph 1 of the Orders made by this Honourable Court on 2 February 2018 be varied to provide that possession is to be given on the date being ten (10) business days after this Honourable Court dismisses the application in paragraphs 2.1 or 2.2 above.
3.The costs of this application be borne as follows:
3.1    in the event that the [applicant’s] application for special leave is refused, the [applicant] pay the respondent’s costs; and
3.2    in the event that the application for special leave is granted, in accordance with the costs order made by the High Court upon its disposition of the appeal to that court.
During the hearing of submissions on the application, counsel for the applicant modified the application with respect to proposed order 2.2. The applicant now seeks a stay from this Court only until resolution of the application for special leave to appeal to the High Court. It is expected that if this application were to be granted, the applicant would approach the High Court for a further stay pending resolution of the ensuing appeal.
It is generally anticipated that if the applicant’s special leave application were to be decided on the papers, such might occur as early as sometime in May this year. However, if the application were to proceed to a hearing, the application might be resolved by sometime in June. However, the timeframes may well be longer. The time for resolution is of some importance to the parties because each wants the carriage of sowing and managing a dry land crop in the upcoming season. Such a crop will need to be sown in April or May. For a number of reasons, a June sowing may be too late or well less than optimal.
It is to be noted that there are extant proceedings between the respondent and the respondent’s former wife in the Federal Circuit Court of Australia, intended to resolve a property settlement dispute between those parties. The former wife of the respondent is the applicant’s daughter and part of the pool of property under consideration in the Federal Circuit Court is the land once owned by the applicant and now owned (as confirmed by Hinton J and by the Full Court) by the respondent. The applicant has been made a party to the proceedings in the Federal Circuit Court. Further, the three parties are engaging in a part heard mediation.
Whilst not of direct relevance it is also noted that, in the event the former wife were to succeed by one way or another in obtaining title to the land in question or part thereof,[5] it is conceivable that arrangements might be arrived at pursuant to which her mother and father, the applicant, would be able to remain in possession of the land or part thereof.
[5] The land is comprised of six separate titles.
In support of the interlocutory application, the applicant read and relies on the fourth affidavit of his solicitor, Kevin McKinley, sworn on 28 March 2018 and his own affidavits, sworn on 25 January 2018, 31 January 2018, 3 April 2018 and 5 April 2018. In opposition to the application, the respondent read and relies upon his own fourth affidavit sworn on 3 April 2018.
This is not a case where a failure to grant the stay sought in proposed order 2.2 would render the application for special leave to appeal and any ensuing appeal in the High Court, or some important component thereof, nugatory. Whether or not the applicant remains in possession of the land in the interim, he will be able to benefit from such rights thereto as he, ultimately, may be found to have following any successful appeal to the High Court. Nevertheless, there is no doubt that he will be put to expense in moving from the land such that, in the event that any appeal to the High Court were to succeed, this expense would be wasted and he would incur further expense in relocating to the land. Further, in the event that he were to hand over the land to the respondent, he would lose control of the husbandry of the land which may ultimately disadvantage him if the land were to be returned following a successful appeal.
For example, the applicant contends (although the respondent does not agree) that he is best placed to continue to farm, manage and preserve the land for the relatively short period between now and when any further litigation in the High Court might be completed. The applicant contends that, with his river water licence, he is best placed to be able to irrigate the land and that the respondent may not be able to irrigate the land appropriately. The applicant contends that if the respondent were to fail to put in the April/May dry land crop or to put it in and manage it badly, the applicant would be disadvantaged on his rightful return. The applicant also contends that the respondent would suffer little or no prejudice by being kept out of possession for a relatively short period of time provided that the applicant continues to manage and maintain the land to the current standard. The applicant has offered an undertaking as to any damages suffered by the respondent in the event a stay were to be granted.
However, the respondent contends that he is suffering and will continue to suffer significant prejudice by being kept out of possession. The matters bearing on prejudice to the respondent identified in his affidavit include the following:
(i)The respondent is owed a very substantial amount as a result of costs orders adverse to the applicant made following the lengthy trial and the appeal and also has an outstanding damages claim against the applicant for conversion including with respect to the 2016 grape harvest and for trespass to land which is, as yet, unquantified.
(ii)There is limited and uncertain evidence bearing on the applicant’s capacity to pay outstanding costs and any damages that may be awarded to the respondent.
(iii)The applicant has offered an undertaking to meet any damages sustained by the respondent in the event a stay of the order to vacate is made. However, the applicant has not provided evidence of his assets, liabilities and income. Such evidence on this topic as there is suggests that the undertaking proffered is likely to be of limited value. The proffered unsecured undertaking as to damages must be viewed in this context and also against the background of the existing substantial liabilities in (i) and (ii) above.[6]
(iv)Whilst the respondent has remained out of possession and unable to farm the land he has continued to be indebted to his bank in the amount of $588,000 secured by a mortgage over the land. The loan at present is on an interest only basis but the respondent expects that the bank soon will require repayments of principal as well. In any event, the respondent at present is earning nothing from the land and is obliged to meet his mortgage commitments and other outgoings from other sources of income.
(v)The respondent wishes to regain possession so that he can farm his land.
(vi)In addition, the applicant has entered into an oral arrangement with another farmer for that person to crop a portion of the land (the dry land portion). The respondent estimates that this will return to him approximately $20,000 per annum which would be a substantial contribution to his annual interest expense. The farmer wishes to start preparing the land for seeding (to occur in late April 2018) as soon as possible.
(vii)Further delay in obtaining possession is likely to lead to the applicant taking responsibility for putting in the next crop (in April 2018) and further disputation between the parties as to ownership of the crop and recompense for work done.
(viii)The grape vines having just now been harvested will require pruning over the winter months. The respondent wishes to attend to this himself rather than leave it to the applicant.
(ix)The applicant is out of time, by some six weeks for filing his application for special leave and will need to obtain an extension of time.[7] In addition, the application for a stay was filed a further three weeks later on 28 March 2018. These delays have exacerbated the potential for prejudice to be suffered by the respondent as referred to above.
[6] Shortly prior to the hearing the applicant filed his sixth affidavit in which he seeks to put dollar amounts on, inter alia, expenses incurred and income earned whilst he has managed the land whilst a trespasser since March 2015 with a view to demonstrating that once the parties' damages and costs issues were to be finally resolved, the applicant's financial position would be significantly better than that suggested by the respondent and such as to provide substantial backing to his undertaking. The affidavit was in general terms and provided minimal support or justification for the figures proffered. Bearing in mind that the parties are still in dispute over the matters canvassed, only very little weight can be given to this affidavit.
[7] The Full Court judgment was delivered on 22 December 2017 and the special leave application not filed until 7 February 2018, some 10 weeks later.
A starting point when considering the question of a stay of execution pending the determination by the High Court of an application for special leave to appeal is the judgment of Brennan J in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1)[8] where his Honour observed:
When an application for special leave to appeal is made to this Court, a jurisdiction to stay may be exercised by the court below and it is to that court - the court in which the matter is pending and which is familiar with the matter - that an application to stay should first be made. In this case the Court of Appeal, not wishing to pre-empt the view that may be expressed in this Court, tailored its order accordingly. In future, there should be no inhibition on the court in which the matter is pending framing a stay order, if a stay be appropriate, to avoid the necessity for application to this Court.
In exercising the extraordinary jurisdiction to stay, the following factors are material to the exercise of this Court's discretion. In each case when the Court is satisfied a stay is required to preserve the subject-matter of the litigation, it is relevant to consider: first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies.
[8] [1986] HCA 84; (1986) 161 CLR 681 at [6]-[7].
As indicated, this is not a case where a stay is required to preserve the subject matter of the litigation. Whilst it would be very inconvenient and likely quite costly for the applicant to leave the land prematurely, the subject matter of the litigation would remain to be prosecuted before the High Court. For this reason, and given that this is not the more usual case where a stay of execution is sought pending the hearing of an appeal as of right, the applicant has a heavy burden to discharge. The factors to be considered are first, whether there is a substantial prospect that special leave to appeal will be granted by the High Court, second, whether the grant of a stay will cause loss to the respondent and third, the balance of convenience.
In this case, the decisions of the trial Judge and on appeal turned in very large part on concurrent findings of fact arrived at upon a consideration of contested oral evidence.[9] Furthermore, on a review of the special leave application, it would appear that the applicant is seeking to press a case or at least a legal analysis not pressed at trial. Moreover the applicant did not appeal against the trial judgment on any of the grounds on which he now seeks special leave to appeal to the High Court. The evidence led at trial on the applicant’s then case, together with the adverse findings of the trial Judge, make his proposed appeal to the High Court a less than ideal vehicle by which to advance the questions of principle identified in the application for special leave. It is not appropriate for this Court to enter into a detailed consideration of the question of prospects of success, nor is it the function of the Court to forecast the outcome of the application before the High Court. Nevertheless, it is necessary to make some assessment of the prospects of the application for special leave to appeal succeeding and for the brief reasons just given, those prospects must be considered as exiguous.
[9] The trial Judge enjoyed the usual advantages in hearing and seeing the two protagonists give their evidence as to the nature of any arrangement arrived at between them. The Full Court recognized and took account of this in accordance with the principles governing appellate review of findings of fact as confirmed in Fox v Percy [2003] HCA 22; (2003) 214 CLR 118.
Ultimately, the primary analysis relating to prejudice concerns the corresponding advantages and disadvantages to each party according to who is to be allowed to put in and manage the new crop. However, the respondent has succeeded at trial and on appeal. Ordinarily, he should be entitled to the fruits of his judgment. Further, according to the respondent’s affidavit evidence which has not been challenged in any substantial respect, there is likely to be quite material prejudice caused to the respondent should a stay be ordered. The balance of convenience favours the refusal of a stay.
In the circumstances, and given that the prospect of obtaining special leave to appeal in the High Court is insubstantial, the application for a stay should be refused.
However, the applicant has commenced his proceedings in the High Court and the timetable for the hearing of the special leave application and any subsequent appeal should leave be granted is now in progress. The fact that a stay is refused in this Court will not prevent the applicant from seeking a stay in the High Court. Indeed, the High Court practice is such that any stay sought from the High Court is most unlikely to succeed unless an applicant has first exhausted the possibility of obtaining a stay from the court below. In the circumstances and, in particular, bearing in mind that possession is due to be handed over, relatively shortly, on 12 April 2018, it is appropriate to grant a short interim stay to enable the applicant to file and press such application for a further stay as the applicant may be advised to make before a Judge of the High Court.

As to the injunctive relief sought in proposed order 2.1, no evidentiary basis has been provided in support of any reasonable apprehension that the respondent intends to sell, further encumber or otherwise deal with the land in the foreseeable future. Indeed the respondent’s affidavit evidence tends to suggest the contrary. He wishes to farm the land. Further, the respondent is presently subject to an injunction granted in the Federal Circuit Court which enjoins him from selling, encumbering or otherwise dealing with the land. Finally, on the evidence available, it has not been demonstrated that the usual undertaking as to damages which would have to be given, would offer sufficient value or comfort to the respondent to warrant granting the injunction. Nevertheless, the respondent has proffered to the Court an executed undertaking in these terms.
UNDERTAKING OF THE RESPONDENT
I PAUL JOHN ROBERTS of [respondent’s address] HEREBY UNDERTAKE TO THE COURT that:
1.Until the completion of the hearing (if any) and determination by the High Court of Australia of the Application For Special Leave to Appeal made by the appellant Christopher Mark Eckert in application No. A10 of 2018, I will not sell, further mortgage, or encumber the land comprised and described in Certificates of Title Register Book Volume 6065 Folio 205, Register Book Volume 6065 Folio 207, Register Book Volume 6065 Folio 208, Register Book Volume 6065 Folio 209, Register Book Volume 6065 Folio 210 and Register Book Volume 6088 Folio 676 (“the Land”) except by way of entering into an agreement for licence for the use of the dry land portion of the Land by a third party for the planting, cultivation, and harvest by the third party of growing crops on the Land during the growing season of 2018.
Dated 6 April 2018
On the basis of this undertaking having been given and accepted by the Court an order in the terms of proposed order 2.1 is unnecessary and refused.
The interim stay we propose to order obviates any need for an order in terms of proposed order 2.3.
The Court makes the following order.
1.Order 1 made by the Full Court on 2 February 2018 which at present requires the applicant to give possession of the land to the respondent on or before 12 April 2018 is stayed for a further five days such that, subject to any further order made by this Court or by the High Court, the applicant is to give possession of the land to the respondent on or before Tuesday 17 April 2018.
The Court will hear the parties on the question of the costs of the application.