Edgar, Jonathan Scott

[1992] FCA 1069

IN THE FEDERAL COURT OF AUSTRALIA ) )

NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 337 of 1991

) NG 667 of 1991

)

GENERAL DIVISION )

BETWEEN:JONATHAN SCOTT EDGAR

First Applicant/Cross Respondent

TALEDI PTY LIMITED

Second Applicant

EASTSIDE INVESTMENTS PTY LIMITED

Third Applicant

TEKIKO PTY LIMITED

Fourth Applicant

AND:FARROW MORTGAGE SERVICES PTY LIMITED (IN

LIQUIDATION)

First Respondent/Cross Claimant

IAN DOUGLAS FERRIER & STEPHEN ROBERT PATRICK

Second Respondents

BETWEEN:FARROW MORTGAGE SERVICES PTY LIMITED (IN LIQUIDATION)

Appellant

JONATHAN SCOTT EDGAR

TALEDI PTY LIMITED

EASTSIDE INVESTMENTS PTY LIMITED

TEKIKO PTY LIMITED

Respondents

15 October 1992

REASONS FOR JUDGMENT

LOCKHART J.

This is a motion for a stay of execution and of proceedings under the judgment of a Judge of the Court (Einfeld J.) given on 26 August 1992, the orders being made thereafter on 14 September 1992. The case is one of considerable complexity as appears from a reading of the learned primary Judge's judgment. It is not suggested that the appellant has no chance of success in the appeal; nor is it conceded that the prospects of success are considerable.

The primary Judge made declarations and orders. The

declarations in substance were that various security documents

were unenforceable and the Court's orders were in furtherance of those declarations; they included orders that the respondents to the principal proceeding deliver up to the applicants to that proceeding muniments of title and discharges of relevant mortgages and that they account for funds held in certain bank accounts which are referred to in order 3 of the primary Judge's orders.

The motion for the stay is essentially pursuant to order 52 rule 17 of the Court's rules from which it is clear, of course, that the appeal itself does not operate as a stay of execution or of proceedings under the judgment appealed from, except so far as the Court or a Judge directs. The prima facie assumption

is that the judgment appealed from is correct and that the Court should not lightly deprive the successful party from the fruits of his victory: see Monk v Bartram [1891] 1 QB 346 and more recently, Federal Commissioner of Taxation v Myer Emporium Limited (1986) 160 CLR 220. The principles are well established.

It has been said that an applicant for a stay must show special circumstances, or exceptional circumstances, in order to obtain his stay. The cases are numerous that support that proposition and, again, I need refer for presently relevant

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purposes only to the decision of Dawson J in Myer at 222-223. It generally will be a special or exceptional case if, unless a stay is granted, the appeal would be rendered nugatory for whatever reason. One such circumstance is where moneys paid may be irrecoverable. But the special circumstances must be such as

would justify departure from the ordinary rule that the successful litigant is entitled to the fruits of his victory pending the determination of his appeal. Special circumstances exist where there is a real risk that it will not be possible for a successful appellant to be restored substantially to his

former position if the judgment against him is executed. Again,

reference must be made to Myer, per Dawson J, at 223.

The Court, of course, has a discretion whether or not to

grant a stay and if so as to the terms on which it will grant

it, those terms being essentially terms that must be fair. The

exercise in which the Court must engage is to weigh the various considerations, such as the competing rights of the parties before it and circumstances such as the balance of convenience:

see The Attorney-General v Emerson [1889] 24 QBD 56, and more

recently, Alexander v Cambridge Credit Corporation Limited (Receivers Appointed) [1985] 2 NSWLR 685, especially at 694 and

695.

In my view, the case has been made out for the grant of a

stay by application of the principles to which I have been

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referred. The real debate between counsel has been whether or not the stay should be granted upon certain terms or conditions.

Counsel for the respondents relies on evidence adduced on

behalf of the respondents to the effect that, unless the

respondents are entitled to execute certain of the orders made by the primary Judge to the extent necessary to pay legal costs

then the respondents will be deprived of their ability to retain

counsel, and would thus suffer a serious disadvantage.

The evidence as to the financial position of the respondents is somewhat slender; but there is no evidence to the contrary of what has been deposed to by the solicitor for the respondents. I am satisfied that I should approach the motion on the footing that the respondents will suffer serious jeopardy in relation to their legal representation if the conditions which the respondents seek to have imposed on the stay are not imposed. I should add that the case is obviously one of

complexity both as to fact and law. The amount of money which is involved in relation to estimates of costs, both of the

proceedings at first instance and on appeal, is a very small fraction indeed of the ultimate value of the fruits of the

judgment and this is a relevant matter to take into account.

The respondents seek, in effect, to have access to certain

of the assets covered by the various security documents to which

I have made reference in respect of costs of the proceedings at

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first instance and on appeal which have been estimated before

me. I think the interests of fairness in the matter as between all the parties to the proceeding are such that it is an appropriate case in which to impose as a condition of the stay a term which would entitle the respondents to a limited execution of the orders made in the proceeding by the primary Judge; but limited to the extent necessary to obtain funds to pay the

proper costs of the respondents of the proceedings at first instance - which includes counsel's fees and also include the

proper costs of the respondents of the appeal, which also would include counsel's fees. By proper costs I mean costs on an

indemnity basis. If no stay is granted the respondents would be

entitled to realise securities and pay their costs. It is fair

that they be entitled to do this even if a stay is granted.

Such a condition should be drafted so as to permit a grant to the solicitors for the respondents of appropriate mortgages and access to moneys from the account referred to in order 3 of the primary Judge's orders. There are various ways, of course, whereby the condition could be appropriately imposed and the method suggested on behalf of the respondents is one such method. It seems to me to be a sensible one and I think it is the correct one to adopt in this case. I therefore propose to grant the stay, but on the condition mentioned.

I certify that this and the preceding four (4) pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Lockhart.

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Associate Dated: 15 October 1992

Counsel for the Appellant

(Farrow Mortgage Services Pty

Ltd (In Liquidation) : J. Beach

Solicitors for the Appellant :	Bruce & Stewart Turton
Counsel for the Respondents :	D.F. Jackson Q.C.
M.E. Burke
Solicitors for the Respondents:	Gadens Ridgeway

Date of Hearing : 15 October 1992

Date of Judgment : 15 October 1992