Engwirda v Engwirda, Regis Projects P/L

[1999] QCA 353

COURT OF APPEAL	[1999] QCA 353
McMURDO P
Appeal No 1860 of 1999a Appeal No 321 of 1999a
DENISE MARILYN ENGWIRDA	Appellant(Plaintiff)
and
JOHN ENGWIRDA	First Respondent (First Defendant)
and
REGIS PROJECTS PTY LTD
(ACN 009 924 761)	Second Respondent (Second Defendant)
and
JOHN ENGWIRDA PTY LTD
(ACN 009 815 829)	Third Respondent (Third Defendant)
and
JULIA PATRICIA ENGWIRDA	Fourth Respondent (Fourth Defendant)
BRISBANE
..DATE 24/08/99
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THE PRESIDENT: The applicant who has filed a notice of appeal in respect of a judgment of Moynihan J delivered on 17 December 1998 applies pursuant to UCPR 761 for a stay of the costs order made by Moynihan J in the Supreme Court of Brisbane on 3 February 1999 pending determination of the appeal. The amount of the costs has been agreed between the parties at $100,000.

An application was made on 12 August 1999 to McPherson JA, who was sitting as the Chamber Judge, to stay the enforcement of the warrant of enforcement based on a certificate of taxation of 9 July 1999. That application was refused but is no bar to the making of this application. There is significant material before this Court which was not before McPherson JA, namely, an affidavit from psychiatrist Dr Edwin Young, with which I shall deal shortly, and a comprehensive account of the applicant's financial position now and over the past months.

The action the subject of the appeal relates to a claim by the applicant (plaintiff) for entitlement to property from the respondent (first defendant), her former de facto husband, and from some connected companies, because of unconscionable conduct on the part of the first defendant leading to a constructive trust in favour of the applicant as beneficiary.

It is well established that the discretion to order a stay of proceedings is only to be exercised where special circumstances exist which justify the departure from the ordinary rule that successful litigants are entitled to the fruits of their litigation, here the costs order, pending the determination of any appeal.

Generally that will occur when, because of the respondent's financial state, there is no reasonable prospect of recovering moneys paid pursuant to the judgment at first instance. However, special circumstances are not limited to that situation and will exist where, for whatever reason, there is a real risk that it will not be possible for successful appellants to be restored substantially to their former position if the judgment, or here costs order, against them is executed - see Commissioner of Taxation and Myer Emporium Limited (1986) 60 ALJR 300 at 301.

The circumstances said to be collectively special here are:

(a)The appeal raises a serious question of law; that is conceded by the respondents;

(b)The appeal is set down for hearing on 19 November 1999 so that the stay should not be

a lengthy one;

(c)Affidavit material in which the applicant discloses her financial position and establishes

that the execution of the costs order will require her to sell her personal goods and

chattels and rely on the charity of others to pursue her appeal;

(d)The applicant has been in a private hospital since
10 August. Her treating psychiatrist, Dr Edwin Young, has diagnosed her as suffering from

major depression, and that she would suffer a very serious exacerbation of her illness were her goods and chattels to be sold off subject to the execution of the costs order.

The respondent's counsel objects to Dr Young's affidavit on the basis of relevance. The health of an applicant, in my view, is clearly relevant in an application such as this where, without the stay, the applicant's health is likely to seriously deteriorate, making it impossible

to restore her to her position if the costs order had not been executed against her. See, for

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example, Holloway and Doyle, CA 125 of 1999, delivered 7 June 1999. Dr Young's
affidavit is relevant and admissible.

Since the judgment the subject of the appeal was given, the applicant has sold two properties which, after a payment of mortgage, has netted her $295,000. She has spent all but $35,000 of that money and has accounted for that in her affidavit. Major payments include loan repayments of $51,000, transfer to Property & Investment trust of $10,000, legal fees of $151,076.70, the transfer of $20,000 to her solicitor's trust account on account of the appeals and taxation of costs. The applicant currently has $23,301.65 in her solicitor's trust account for the purposes of the appeal, although there are unbilled counsel fees and solicitor's costs relating to the taxation.

The applicant is unemployed and has no income other than a Newstart allowance, as a condition of which she must seek employment. As has been noted, she is currently hospitalised and receiving treatment for major depression. This condition is not likely to improve until the litigation is finalised.

There is, of course, no suggestion here that the respondent's financial state is such that there is no reasonable prospect of recovering moneys paid pursuant to the costs order at first instance should the applicant be successful on appeal, nor is there any evidence of any particular prejudice demonstrated to the respondent should the stay be granted, other than not having access to the costs money for the period of the stay and the danger that even less of the $35,000 remaining cash is likely to be available by the time the appeal is determined. There is no suggestion the stay would cause financial hardship to the respondent.

In the end, I am satisfied that special circumstances have been shown here which demonstrate that there is a real risk that if the stay of the costs order is not granted it will not be possible for the applicant, should she be successful on appeal, to be restored substantially to her former position. The applicant's psychiatric illness will be exacerbated by the execution of a costs order and the selling of her personal assets. The appeal is listed in November and there are good prospects that the appeal will be determined before the end of the year.

On the other hand, as much as possible should be done to protect the respondent's position.
The applicant, who has no source of income other than Government allowances, may need
some further moneys to pursue her appeal and for living and medical expenses until the
appeal is determined. The amount of $25,000 should, however, be able to be paid into
Court without causing hardship.

I propose to order that upon the applicant making a payment into Court of $25,000 the costs order made by Moynihan J in the Supreme Court at Brisbane on 3 February 1999 be stayed pending determination of the appeal.

As Counsel for the applicant foreshadowed that there may be consequential orders flowing from any stay order, I will hear arguments as to the precise form of the orders.

MR HODGES: Your Honour, the further consequential order I would seek would be that
the execution, including any steps in aid of execution of the costs order of Moynihan J of
3 February 1999 be stayed.

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THE PRESIDENT: Just slow down a bit, please.

MR HODGES: Sorry, Your Honour. The execution-----

THE PRESIDENT: The execution, including any steps in aid of the execution order-----

MR HODGES: Yes, of the order of Justice Moynihan of 3 February 1999 be stayed until-----

THE PRESIDENT: Just a tick.

MR HODGES: Sorry, yes.

THE PRESIDENT: On 3 February 1999-----

MR HODGES: Be stayed-----

THE PRESIDENT: Yes.

MR HODGES: -----until hearing and determination of the appeal, or both appeals, 321 of

1999 and 1860 of 1999.

THE PRESIDENT: Could you just give me those numbers again?

MR HODGES: 321 of 1999-----

THE PRESIDENT: Yes.

MR HODGES: -----and 1860 of 1999.

THE PRESIDENT: That's all you're asking for?

MR HODGES: Yes.

THE PRESIDENT: Did you wish to be heard?

MS PHILIPPIDES: Yes, Your Honour. In my submission we would need to have some time period in relation to the payment of money into Court and I would propose seven days.

THE PRESIDENT: That sounds sensible, Mr Hodges.

MR HODGES: The payment of moneys within seven days?

THE PRESIDENT: Yes.

MR HODGES: Yes, certainly.

THE PRESIDENT: So the order should be then that upon the applicant making a payment into Court of $25,000 within seven days. Yes, thank you.

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MS PHILIPPIDES: And the other order be costs of the application, Your Honour, which I would seek.

THE PRESIDENT: What do you say?

MR HODGES: I wish to be heard on that. Your Honour, I seek that costs be in the cause.
That is exactly what Justice Dawson did in Commissioner of Taxation and Myer Emporium.
Particularly so in this case where the applicant has been forced to come to Court twice.
She has an appeal. She alleges that the reason that she is in this state of having to come to
Court is because of the unconscionable conduct of the respondent, and that will be
determined on the appeal, and the person who is successful in the appeal would, in the
ordinary event, receive the costs of this application.

MS PHILIPPIDES: Your Honour, I think there is a difference in this case which distinguishes Myers, and that is that it is not a situation of whether to grant or not grant a stay, but that no reasonable offer - for example, to pay some moneys into Court - was made, so that there was no - had something like that been offered, and had the respondent refused in those circumstances, then Your Honour might be minded to go the other way, in fact, and award costs in favour of the applicant, but in a situation where there was clearly a fund there but no attempt to put some aside or offer some aside for the respondent's costs, in my submission the respondent should have it's costs.

THE PRESIDENT: I am satisfied the appropriate order as to costs in this case is that the costs should be costs in the cause. The orders are:

1.Upon the applicant making a payment into Court of $25,000 within seven days, the costs

order made by Moynihan J in the Supreme Court of Brisbane on 3 February 1999 is stayed pending determination of the appeals;

2.The execution, including any steps in aid of the execution order of Moynihan J on 3

February 1999 is stayed until hearing and determination of the appeals 321 of 1999 and 1860 of 1999;

3.The costs of and incidental to this application are costs in the cause.

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