Ian Rodda Pty Ltd v Rodda

[2015] SASCFC 146

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court: Permission to Appeal in Private)

IAN RODDA PTY LTD & ANOR v RODDA & ANOR

[2015] SASCFC 146

Judgment of The Full Court (ex tempore)

(The Honourable Chief Justice Kourakis, The Honourable Justice Vanstone and The Honourable Justice Stanley)

1 October 2015

APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - STAY OF PROCEEDINGS

The applicants sought a stay of execution of orders made by a Judge of this Court on 26 August 2015. The stay was sought pending an appeal to the Full Court. A single Judge of this court refused the application for a stay.

The applicants apply for permission to appeal the decision to refuse to grant a stay to the Full Court.

The applicants made a further fresh application for a stay of execution of the same orders of the 26 August 2015.

Held (The Court):

1.  Permission to appeal is refused.

2.  Application for a stay of execution of orders is refused.

Hackney Tavern Nominees Pty Ltd (1983) 33 SASR 590; Advanced Building Systems & Anor v Ramset Fasteners (Aust) Pty Ltd (1997) 145 ALR 121, considered.

WORDS AND PHRASES CONSIDERED/DEFINED

"stay of orders", "stay of execution of orders", "stay pending appeal", "appeal of application for stay"

IAN RODDA PTY LTD & ANOR v RODDA & ANOR
[2015] SASCFC 146

Full Court:  Kourakis CJ, Vanstone and Stanley JJ

THE COURT:

Background

1. This is an application for permission to appeal against an order refusing a stay of execution on a judgment of this Court granting equitable relief to the Respondents over farming property of which the first Applicant is the registered proprietor.  The second Applicant Ian Rodda is the father of the first Respondent Stuart Rodda.

2. In a judgment delivered on 1 July 2015 Nicholson J found that:

   ·over an 18 year period Ian Rodda repeatedly made representations to the Respondents regarding Stuart Rodda’s future ownership of the farming land and equipment; 

   ·the Respondents reasonably relied on those representations to their detriment; and  

   ·the Respondents were entitled to a proprietary remedy moulded so as to recognise in a just and proportionate manner their unfulfilled expectation as to a beneficial interest in the farming land and equipment.

3. By judgment delivered 26 August 2015, Nicholson J made orders (among others):

   ·declaring that the farming property known as Ocean Downs had been held in equity by the Respondents since 1 December 2012 and ordering that it be transferred to them within 28 days, together with payment of the net profits and rents from the use and exploitation of Ocean Downs (after all due allowances are made for the work and contributions of the defendants) since 1 December 2012; 

   ·that the unpaid trust distributions in the amount of $780,000 owing to the Respondents be paid to the Respondents (plus interest from the date of demand in April 2014); and 

   ·that an additional $1.5 million in equitable compensation was due to the Respondents as of 1 December 2012, plus interest of $150,000 to the date of the orders of 26 August 2015, making a total of $1.65 million. The equitable compensation was:

   “…in lieu of a constructive trust over a portion of the plant and equipment used in the farming business and the FMDs in Ian’s name and also recognising or allowing for the finding that the pre-July 2003 equity bore a relationship to the farming business (ie, including Yaringa) as a whole.”

4. On 14 September 2015, the Applicants filed a Notice of Appeal against the substantive orders of Nicholson J.

5. On 24 September 2015, Kelly J refused an application for a stay of execution  brought by the Applicants pursuant to r 300 of the 2006 Rules and/or s 17 of the Enforcement of Judgments Act 1991 (SA) in respect of the payment of equitable compensation (paragraph 4), the transfer of legal title to the Ocean Downs Land (paragraphs 9-10), the charging procedure (paragraphs 15-17), and refused to make any orders restraining the Respondents from taking immediate possession of the Ocean Downs Land. By consent, Kelly J granted a stay in relation to the account and inquiry (paragraphs 11-14).

6. Kelly J extended the time for compliance with the relevant orders to 11:59 pm on Thursday, 1 October 2015.

7. The Applicants now make:

   1an application for permission to appeal to the Full Court from the judgment and orders of Kelly J; and 

   2further or in the alternative, a further or fresh application for a stay of execution based on the material before Kelly J and the further affidavit material subsequently filed in support.

   The Submissions

8. The parties make competing contentions on the test to be applied for an application for a stay.

9. The Applicants contend the primary judge applied the wrong test at [5] and [14] of her Honour’s reasons.   The applicants submit that Kelly J wrongly held that they “must establish” a test that was framed as a three-stage inquiry, involving the test for an interlocutory injunction.   They submit that test has been applied in New South Wales, but not applied in this State.  The applicants contend that the test in South Australia is whether the justice of the case requires the making of such an order.

10. The Respondents contend that the norm is no stay.[1] They contend that an applicant for a stay must show:

    1first, that the appeal raised serious issues for the determination of the appellate court; 

    2secondly, that there was a real risk that the applicant would suffer prejudice or damage of some significance if a stay were not granted, which prejudice or damage could not be redressed by a successful appeal; and

    3if these two preconditions are satisfied, thirdly, that the balance of convenience favoured the granting of a stay – that is, that the potential detriment to the appellant if the stay is refused but the appeal is successful outweighed the potential detriment to the respondent if the appeal is dismissed but the stay has been granted.

    The Applicants also contend that Kelly J erred in finding that the Applicants had to discharge an onus of demonstrating “irrevocable prejudice such as to render any appeal nugatory”. 

    [1]    Hackney Tavern Nominees Pty Ltd (1983) 33 SASR 590 at 594.

11. The Applicants’ primary submission on the merits of the application for the stay is that it is very likely that because of the Respondents’ financial state, money paid by way of equitable compensation pursuant to the judgment may not be recovered.  They contend that there is a real risk that the Applicants will not be restored to their former position should the judgment be executed yet the appeal succeed.

    Decision

12. In the circumstances of this case the difference between the competing formulations of the test for a stay put by the parties is not material and did not have any material affect on the exercise of discretion by Kelly J. 

13. On a consideration of the reasons of Kelly J as a whole, it is plain that her Honour took into account the possible prejudice to the Applicants that should the appeal be allowed they might not recover the equitable compensation paid by them.  So much is clear when the impugned passages in paragraph [14] of the reasons of Kelly J are considered against her Honour’s discussion of the risk of prejudice in paragraphs [9] and [10].

14. The balance of convenience strongly favours the transfer of the Ocean Downs and to the Respondents.  Disputation over the proper management of the crops on that land has continued.  The evidence does not disclose sufficient reason to doubt the competence and capacity of the Respondents to properly manage the land and harvest the crops.  It is best that the Respondents be left to maximise the return from the crops on the Ocean Downs and without interference.

15. Although not granting a stay Kelly J made an order protecting the position of the applicants with respect to the transfer of the Ocean Downs and in these terms:

    Until the hearing and determination of the appeal the respondents be restrained and an injunction is hereby granted restraining them from transferring, selling, disposing of or encumbering the whole or any part of the Ocean Downs Land (as defined in paragraph 3 of the orders made by Nicholson J on 26 August 2015).

16. That order sufficiently protects the Applicants’ interest in the Ocean  Downs land.

17. It can be accepted that there is some risk that should the Applicants succeed entirely on appeal, they would not recover the equitable compensation paid from the other assets of the Respondents.  However, no error in the balancing of the relevant considerations has been shown. 

18. Moreover, we have come to the same conclusion.  Having regard to the prospects of success on appeal generally, and in particular such prospects as there are, of a complete reversal of the decision of Nicholson J, and the risk that there may not be full recovery from other assets of the Respondents, we nonetheless conclude that the balance of convenience and the interests of justice favour the orders made by Kelly J.

    Orders

19. The application for permission to appeal is refused.

20. The Applicants have also made a fresh application for a stay.  The further material on which they rely does not warrant a fresh consideration of the matter.  The further application is dismissed.

21. The Applicants are to pay the Respondents’ costs.