Kowalczuk v Accom Finance Pty Ltd

This matter concerned an application for a stay of a judgment made by the Supreme Court of New South Wales, which had ordered the judicial sale of a mortgaged property. The applicant, Mr. Kowalczuk, sought to stay this order pending the determination of his appeal against the primary judge's decision. The respondent, Accom Finance Pty Ltd, was the mortgagee seeking to enforce its security.

The central legal issue before Campbell JA was the principles governing the grant of a stay of a judgment ordering the enforcement of a mortgage by judicial sale. Specifically, the court had to consider whether an exception to the usual rule, requiring repayment of principal and interest or payment into court, applied where the very existence of the power of sale under the mortgage was under attack. The court also considered the onus of proof on the applicant for the stay and the overall balance of convenience.

Campbell JA reasoned that while a successful litigant is ordinarily entitled to the fruits of their victory, and the interest rates charged by the mortgagee raised significant concerns, an experienced trial judge had already considered these matters and found the mortgage not liable to be set aside. The court noted the potential risk to the mortgagor if the mortgagee, a proprietary limited company, were unable to repay sale proceeds should the appeal succeed. However, this risk was mitigated by the primary judge's order that sale proceeds be held on trust pending further order, which would likely delay distribution until the appeal was resolved. The difference in outcome for the mortgagee between an immediate sale and a sale after the appeal was therefore considered comparatively small, particularly as the mortgagee would not be able to earn interest on distributed proceeds during the appeal period. The court also accepted that mortgage payments could be maintained, which was in the mortgagor's financial interest.

The court ordered that the orders made on 17 July 2007 in the lower court proceedings be stayed pending the determination of the appeal. The costs of the stay application were to be costs in the appeal.