Firewood and Scantling Pty Ltd v R L Newman Pty Ltd

[1989] TASSC 102

Serial No. B24/1989
List “B”

COURT:                 SUPREME COURT OF TASMANIA

CITATION:            Firewood and Scantling Pty Ltd v R L Newman Pty Ltd [1989] TASSC 102; B24/1989

PARTIES:  FIREWOOD AND SCANTLING PTY LTD
  v
  R L NEWMAN PTY LTD

FILE NO:  106/1987
DELIVERED ON:  23 June 1989
JUDGMENT OF:  Wright J

Judgment Number:  B24/1989
Number of paragraphs:  5

Serial No B24/1989
File No 106/1987

FIREWOOD AND SCANTLING PTY LTD v R L NEWMAN PTY LTD

REASONS FOR JUDGMENT  WRIGHT J

23 June 1989

1. The defendant applies for a stay of execution pending appeal, pursuant to the provisions of O76, r32 of the Rules of Court. The plaintiff has commenced an appeal claiming that there was a misdirection in law at the trial of this action which resulted in judgment being entered for the plaintiff in respect of the second cause of action for a lesser amount than justified by the jury's findings. The defendant, cross–appealing out of time by leave of the court, contends that the amount of the judgment entered at the trial was excessive.

1. The plaintiff recovered a judgment for $131,977.05 and costs to be taxed. The sum of $40,000 paid into court by the defendant, plus accrued interest thereon, has been paid out to the plaintiff's solicitors in part satisfaction of the judgment debt. Interest amounted to $1,680 and there is thus a balance of $90,297.05, plus costs owing in accordance with the terms of the judgment.

1. Upon the hearing of this application there was a dispute as to whether or not, upon the plaintiff being wholly unsuccessful on the appeal and the cross–appeal, there would be any sum still owing to the plaintiff by the defendant. It is not possible for me to resolve this question upon the current application, having regard to the state of the evidence. In any event, whilst the defendant seeks only to "vary" the judgment in the notice of cross–appeal, it is very doubtful in my view whether this could be done without re–submitting the case to a jury to re–assess damages. The only sensible method of approach therefore is to assume that the net result of the appellate proceedings may be that the defendant will have nothing further to pay to the plaintiff. However, the cardinal rule is that the successful party is prima facie entitled to the fruits of litigation notwithstanding an appeal, unless there are special circumstances justifying a stay of execution. Such circumstances may exist if, due to the financial state of the party successful at trial, there will be no reasonable prospect of recovering monies paid pursuant to the judgment if the appeal is successful. See Federal Commissioner of Taxation v Myer Emporium Ltd No 1 (1986) 160 CLR 220.

1. It is clear from the cross–examination of Mr Webster that many of the matters stated as fact in his affidavit are merely conjecture or inference. Consequently, on the basis of the acceptable substance of his evidence, I am not able to find positively that the applicant defendant has no reasonable prospect of recovering monies which may be paid by it pursuant to the judgment. However, as Dawson J. said in Federal Commissioner of Taxation v Myer Emporium Ltd No 1 (supra):

"Special circumstances are not limited to that situation and will, I think, exist where for whatever reason 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. See McBride v Sandland No 2 (1918) 25 CLR 369 at 375".

1. Notwithstanding the paucity of the evidence, I think it is just possible to discern a risk of this kind in the present case. On the other hand, the defendant itself appears to lack financial substance and although its liability is partially covered by insurance, the bulk of the judgment must be recovered, if at all, from the defendant company itself. If its financial position deteriorates between now and the disposal of the cross–appeal due, for example to the incurrence of heavy legal fees or for any other reason, the plaintiff's position may be severely prejudiced. Furthermore, it is difficult to see how the plaintiff could be deprived of its substantial costs of the action even if the defendant succeeds on the issues raised for determination in the Full Court. I have therefore concluded, not without difficulty, that on balance, the plaintiff should not be prevented from recovering a further $45,000, pursuant to the judgment pending the appeal. Execution for any amount in excess of that sum will however, be stayed. It is proper I think to reserve the costs of this application pending the outcome of the appeal, and subject to submissions by counsel, that is the course I propose to take.