Heinrich v Commonwealth Bank of Australia No. Scgrg-98-1266

[2000] SASC 129

HEINRICH v COMMONWEALTH BANK OF AUSTRALIA
[2000] SASC 129

Appeal from a Master

1. DEBELLE J.     This is an appeal from a decision of a Master dismissing the appellant’s application for an order staying the operation of an allocatur.

2. The allocatur concerns the costs of this action.  On 12 February 1999, Nyland J made an order by consent dismissing the proceedings the subject of this action.  The action had been instituted by the appellant who I will call Mr Heinrich.  The judge ordered Mr Heinrich to pay the respondent bank its costs of the action.  The allocatur is dated 7 June 1999 and certifies that those costs have been taxed and allowed in the sum of $41,395.14.

3. On 17 August 1999 Mr Heinrich applied for a number of orders including a stay of the allocatur.  The other applications had been dealt with before the application for the stay had been heard.  On 22 September 1999 the application for a stay was dismissed by a Master.  Mr Heinrich appeals from that decision.

4. The dismissal of this action did not bring to an end the litigation between Mr Heinrich and the bank.  The bank is the plaintiff in other proceedings which are the action no. 1468 of 1993 (“the other action”).  Mr Heinrich is the defendant in those proceedings.  In those proceedings, the bank seeks to recover from Mr Heinrich monies which the bank alleges are due and owing to it.  Mr Heinrich had filed a defence and counterclaim in the other action.  The counterclaim re-agitates the issues in Mr Heinrich’s claim in these proceedings.  By his counterclaim he claims a monetary judgment in excess of any amount found to be owing to the bank.  It was decided that the one action was sufficient in which to prosecute Mr Heinrich’s claims against the bank.  It was for that reason that orders were made by consent dismissing this action.  The action was being heard by Nyland J during 1999.

5. Mr Heinrich had sought the stay on the ground that the amount which he claimed by way of counterclaim in the other action will exceed any monies found to be due and owing by him to the bank as well as the costs the subject of this action.  He is unable to pay the costs of this action.  He submitted to the Master that it is likely that the bank will commence bankruptcy proceedings to enforce its judgment for the costs.  He was concerned that, if a trustee were appointed to his bankrupt estate, he would lose both the ability to defend the other action and to prosecute his counterclaim in that action.  The Master did not accept Mr Heinrich’s submissions.  He took the view that it was not possible to assess the respective prospects of success of Mr Heinrich and the bank.  He did not believe that the possibility that Mr Heinrich might succeed against the bank was very persuasive.  He also rejected Mr Heinrich’s submission that he should order a stay because bankruptcy would result in the bank enforcing its order for costs.  The Master, therefore, dismissed the application.

6. This appeal from the Master was not heard in a conventional way.  Mr Heinrich was suffering from ill-health and also had to attend to his harvest.  The parties agreed that I should proceed on their respective written submissions and written submissions were exchanged.  In December 1999 I reserved judgment.  After I had done so, both parties informed me that Nyland J had published her reasons for judgment in the other action.  Those reasons were published on 24 February 2000.  In essence, Her Honour upheld the bank’s claim and dismissed Mr Heinrich’s counterclaim.  On 1 March 2000 Her Honour ordered, among other things, judgment for the bank in the sum of $673,358.81, together with interest from 11 January 2000.  She dismissed Mr Heinrich’s counterclaim.  She ordered Mr Heinrich to pay the bank its costs of the action.  In his further written submissions, Mr Heinrich has expressed dissatisfaction with the judgment of Nyland J.  However, there is as yet no appeal from that decision.

7. As already mentioned, Mr Heinrich sought a stay pending the hearing of the other action.  He contended that what might be due by way of costs would be exceeded by his counterclaim.  Given that Nyland J has given judgment for the bank and has dismissed his counterclaim, the ground on which the application was based has dissipated.  Furthermore, there is no other ground which, in the present circumstances, would justify ordering a stay.  What Mr Heinrich seeks is, in effect, a stay of execution of the allocatur.  His application is tantamount to an application for a stay of judgment and it is therefore appropriate to determine the application by applying the tests which are relevant to such an application.  While this Court has in earlier years held that exceptional circumstances must exist before a stay is granted: see, for example, Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Pty Ltd (1972) 7 SASR 268 at 325 – 326, more recently this Court and other courts have held that there is no limitation upon the court’s broad discretion so that an order granting a stay will be made when the applicant demonstrates sufficient reasons for the exercise of the discretion in his favour: Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 at 694; Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65; Duke Group Ltd v Pilmer (No 9) (Unreported, 15 June 1998, Mullighan J, Judgment No. S6716); and Technilock (Australia) Pty Ltd v Mondami Pty Ltd [1999] SASC 94. Although in some jurisdictions the applicant must discharge the more stringent test of demonstrating the existence of special and exceptional circumstances (see, for example, Lagarna Pty Ltd v Bridge Wholesale Acceptance Corporation (Australia) Ltd [1995] 1 VR 150), I respectfully agree that an applicant need do no more than demonstrate sufficient reason for the exercise of the discretion. Even on this more liberal test, Mr Heinrich’s application must fail. In this action he has consented to judgment and the costs order is a consequence of that judgment. Effect has been given to that costs order by the taxation of costs. Mr Heinrich has failed in the other action. There is no appeal from the judgment in the other action and the time within which to appeal has elapsed. I have had careful regard to all of the matters which Mr Heinrich set out in his notice of appeal and in his submissions. However, there is simply no ground which justifies ordering a stay.

8. For these reasons, I would dismiss the appeal.