Education Australia Ltd (formerly Tanaka Holdings Pty Ltd) trading as Wessex College v Commonwealth of Australia

[1994] FCA 1116

IN THE FEDERAL COURT OF AUSTWIA ) No. NG 275 of 1992

W	Y	)
GENERAL DIVISION	1

Between :  EDUCATION AUSTRALIA PTY LIMITED (formerly Takama Holdings Pty Ltd) t/as Wessex College & Wessex College of English

Appellant

And:  COmONWEALTH OF AUSTRALIA

Respondent

REASONS FOR JUDGMENT

EINFELD J SYDNEY 21 SEPTEMBER 1994

The appellant is Education Australia Pty Limited trading as Wessex College, an institution that teaches English to persons to whom English is not a first language including persons who come to Australia for the purpose of learning English. On 3 September 1993 judgment was entered against the appellant by Justice Beaumont in favour of the Commonwealth of Australia who was by assignment and otherwise seeking to recover the fees paid in advance by various potential students of the Wessex College emanating from The People's Republic of China who were, due to political and other events, unable to take up their studentship

(the Wessex proceedings).

An appeal from that judgment was launched and on 6 December 1993, Justice Lockhart, by consent, ordered that execution be stayed until further order. This order was made upon undertakings that the appellant would prosecute the appeal with all due diligence and expedition and that it would not deal with its assets other than in the usual course of business without two weeks written notice.

There was heard in conjunction with the Wessex proceedings before Justice Beaumont another case (the Ling proceedings) in which a similar recovery of advance fees was sought and, by the judgment of his Honour, obtained by the Commonwealth against an institution which was run by a Mr Ling. The Ling judgment was also appealed and a stay of execution was also ordered. This stay was expressed to expire and did in fact expire upon the judgment in that case of a Full Court of this Court which held in June of this year that the judgments of Justice Beaumont in both the Ling and Wessex proceedings should be upheld and the appeals dismissed.

On 1 July the unsuccessful parties in both proceedings applied	for special leave to appeal to the High Court and it is expected
that those applications will be heard either in December 1994 or February 1995. The Commonwealth of Australia now seeks by a motion the form of which I will ignore because it is inappropriate, but the substance of which is that the consent order for the stay made by Justice Lockhart in December 1993 in the Wessex proceedings be varied and declared to have expired at the time the Full Court dismissed the appeal in June. In substance this amounts to a proposition that the appellant should not have a stay of execution until the completion of the High Court's consideration of the matter.
In July this year an application was made by the appellant in the Ling proceedings for an extension of the stay to abide the decision of the High Court. The extension was refused by Justice Davies largely on the ground that, in his Honour's view, there were insufficient prospects of success to grant a further stay. His Honour said that he would have come to the same conclusion as the Full Court on the matters raised and that there was no reason at all to stop the Commonwealth from commencing bankruptcy proceedings against Mr Ling, proceedings which his Honour felt would be unlikely to reach the position of a sequestration order until after the High Court had considered the matter. If in fact the application for a sequestration order came on before the High Court had considered the matter, his Honour felt it likely that a judge would grant an adjournment to abide the High Court's judgment. Thus Justice Davies' reasoning was that there was no
reason to stop the ordinary processes. of enforcement because actual enforcement was unlikely to occur before the High Court
had completed its consideration of the matter. It was also relevant that in the Ling proceedings the judgment given was for a sum in excess of $10,000,000 and on the evidence before his Honour, Mr Ling was quite unable to pay any of that sum and bankruptcy was therefore the likely outcome.
This case is somewhat different. Here the judgment was for a figure in excess of a mere $2,000,000, and I am favoured with an affidavit by the accountant/manager and Bursar of Wessex College who explains that if execution was not stayed, Wessex would only be able to pay a small proportion of the amount owing. If then there were enforcement proceedings, which in this case would presumably have to be an application for a winding up of the appellant company, there would be a number of serious consequences, including that the College would be unable to continue to run its business, that it would thereby have to displace in excess of 100 students who were presently undertaking courses there, and that it would, in fact, be unable to instruct solicitors and counsel and prosecute the appeal in the High Court.
In addition, it is expected that some 80 students already recruited will enrol in courses to take place in January, February and March 1995, and the af f idavit points out that there are also 22 staff employed by Wessex in various positions including teaching. It is also the fact, as the papers reveal,
December 1993, some $30,000 has been paid into an interest- that in accordance with another of Justice Lockhart's orders in
bearing deposit by way of security for costs of the appeal to the Full Court. The affidavit of the Bursar further states that Wessex is prepared to consent to the balance of the moneys still in that account remaining there as security for the High Court appeal.
The Commonwealth sought to argue its motion on the traditional basis of an application for a stay by an unsuccessful litigant at an earlier stage in the judicial process. In such matters, questions are raised about the arguability of the appeal, balance of convenience and so on, in accordance with well settled principles. However, this case is of quite a different kind. The order of Justice Lockhart will without variation operate so as to continue a stay until a further order of the High Court or this Court. Indeed, the matter being presently before the High Court, it might be thought that this application should have been made to that Court rather than here.
The argument that the Commonwealth puts is that it was always intended that the order in this case should mirror the order in the Ling proceedings and that the stay only operate until the completion of a consideration by a Full Court of this Court. It was said that the terms and context of the order made or approved by Justice Lockhart in December 1993 support that contention. It is said to be clear that what the orders had in mind was the appeal to the Full Court and not further. The stay order in this
case was for some reason made some three months after the stay order in the Ling case, and obviously nobody apparently went to
the trouble of just repeating the same terms but in fact fleshed them out somewhat so as to include the undertakings and the alternative formulation to which I have earlier referred.
However, in my opinion, the order stands on its own feet. There is no evidence, other than by inference, that the intention suggested by the Commonwealth was present in the minds of the parties at the time or brought to the attention of Justice Lockhart. An affidavit read by the Commonwealth in these proceedings stated in bold terms that in fact that was the intention but I refused to admit that assertion into evidence in its pure form because, amongst other reasons, the person providing that information, an officer of the Australian Government Solicitor, would not have been the person who formed the intention. In other words, if it had been the intention, it must have been formed by somebody who was instructing the Australian Government Solicitor and there is no evidence about that at all. There is simply no evidence, for example, that there were any discussions between the parties which wouldmirror an intention or support an intention that the "until further order" provision was intended to mean the end of the Full Court proceedings. If that had been the intention, no doubt it would have been expressed as it was in the Ling matter.
I must certainly take into account the fact that the context of Justice Lockhart's order seems to be about matters concerningthe
considerations is that as this application raises matters which appeal to the Full Court but the importance of these
are not normally raised in stay applications, it really falls to the Commonwealth to establish a basis upon which it should be concluded that there was an error.
Without evidence of the appropriate intention that becomes quite difficult and I do not see why the Court should search through a document to try to read into what the parties themselves formulated something that is not there or read down or qualify in some way what is there. Parties of this kind are not without adequate capacity and advice and I do not think it is appropriate for the Court to try to put itself in the position of considering the minds of the parties at the relevant time on a matter such as this without evidence when direct evidence would have been possible if it had been available.
There is one other matter that ought to be said about this matter. If I were even to accept the concept that there ought to be inferred or implied that what was intended was a cessation of the stay at the end of the Full Court proceedings, I would then have to consider an alternative notice of motion presented on behalf of Wessex College that a stay of execution be granted until the end of the High Court proceedings. A consideration of that matter would give rise to the normal considerations undertaken by Justice Davies in the Ling proceedings, viz what the chances are of success of the appeal to the High Court.
to ask a single judge who spends just a few minutes on a case For my own part, except in a very obvious case, it is invidious
with which he is not familiar to try to second guess the High Court. It is true that in this particular case four judges have held in favour of the Commonwealth, and one other has expressed himself in passing as favouring the same result. That is a fair weight of judicial learning which the appellant will have to overcome, but I am not in a position to consider the matter and

even if I had been invited to would have declined to do so. A judge cannot be asked in a duty list on the run to consider, on a scanty and scanning reference to other judgments, whether an appeal will or will not succeed.

This is particularly the case when, as I see it, all the prejudice and balance of convenience weigh on the side of the appellant. The Commonwealth claims no hardship in the event that it cannot execute its judgment immediately. The length of time involved is quite limited. The case will either be disposed of by the High Court in six weeks or so or in three or four months. Having regard to the fact that this matter goes back to student fees paid as early as 1987, it is difficult to argue that there is a sense of urgency. There is no evidence that Wessex College or its proprietors are seeking to secrete away their assets.

According to the undisputed evidence which was not cross- examined, it is a functioning body taking forward bookings for students well into next year. There seems no reason why, pending an appeal to the High Court in a matter of some legal complexity, steps should be permitted which would have the result of

displacing several employees, a large number of students and a	functioning and apparently successful business.
I was informed from the bar table that the Commonwealth has in
fact repaid to the relevant students the money paid in advance and is recovering the sums. When and if it does recover these monies, it will also, no doubt, recover interest on their non- payment from the relevant period. No doubt interest figured in
the primary judgment and will continue to figure. There seems no reason at all why the Commonwealth ought not to bear that burden when the corresponding burden would be for a private company to close up and cease to operate altogether to the great disadvantage of all those who depend upon it for a livelihood and for training.
That says nothing about the morality or propriety of those who conduct it, but only of those who depend upon it. So that, even if a consideration were undertaken of the likelihood of success, the best that could be said would be something along the lines of Justice Davies' remark that the chances of success were not high, but not that the appeal had no chance of success at all and therefore that balance of convenience questions should not even be considered. It seems to me that the appropriate order to make in this case is merely to allow the consent order of December
1993 to operate and allow the parties, if they wish, to approach
the High Court for any variation of that order they now seek.
The motion of the Commonwealth for the variation of Justice
Lockhart's order of 6 December is dismissed with costs.