M R & R C Smith Pty Ltd t/as Ultra Tune (Osborne Park) v Wyatt - [2011] WASCA 43

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: M R & R C SMITH PTY LTD T/AS ULTRA TUNE (OSBORNE PARK) -v- WYATT [2011] WASCA 43

CORAM: PULLIN JA

HEARD: 11 FEBRUARY 2011

DELIVERED : 11 FEBRUARY 2011

FILE NO/S: CACV 132 of 2010

BETWEEN: M R & R C SMITH PTY LTD T/AS ULTRA TUNE (OSBORNE PARK)
Appellant
AND
ROBERT BRUCE WYATT
Respondent

ON APPEAL FROM:
Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA
Coram  :WAGER DCJ
Citation  :WYATT -v- M R & R C SMITH PTY LTD [2010] WADC 178
File No  :CIV 562 of 2006

Catchwords:

Practice and procedure - Application for suspension of judgment pending appeal - Turns on own facts

Legislation:

Nil

Result:

Application granted

Category: B

Representation:

Counsel:

Appellant: Mr G P Bourhill
Respondent: Mr B L Nugawela

Solicitors:

Appellant: Tottle Partners
Respondent: MacDonald Rudder (Northbridge)

Case(s) referred to in judgment(s):

Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308
Samuels v The State of Western Australia (2005) 30 WAR 473; [2005] WASCA 193

PULLIN JA: The appellant is appealing against a decision of the District Court where the appellant was found liable for personal injuries suffered by the respondent in a fall on stairs at work and ordered to pay a sum of about $1.1 million.
The respondent, having won the case, would like to have the money for various purposes which are set out in affidavits which have been filed. Prima facie, a successful litigant at first instance will be entitled to enforce the judgment pending the determination of any appeal. The appellant has sought a suspension order under the Civil Judgments Enforcement Act 2004 (WA) and under that Act the court may only make a suspension order if there are special circumstances that justify the making of such an order.
The general principles that apply in relation to such applications; that is, an application for a stay, were originally set out in the case of Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308. That was a decision before the Civil Judgments Enforcement Act was passed, but the principles set out in that case have been applied subsequently in relation to applications under the Act and the same principles apply in relation to an application for a stay under the Supreme Court (Court of Appeal) Rules 2005 (WA).
It is for the applicant for a stay to move the court to a favourable exercise of its discretion. As already indicated, the court will not grant a stay unless special circumstances are shown justifying the departure from the ordinary rule and the first issue which usually has to be confronted is whether or not a stay is necessary to preserve the subject matter or integrity of the litigation or where the refusal of a stay could create practical difficulties in respect of the relief which may be granted on appeal; that is, that without the grant of a stay, the right of appeal will be rendered nugatory.
I am satisfied in this case that if all of the money were paid over to Mr Wyatt, that Mr Wyatt has no means of repaying the money if he spends the money, dissipates it, gifts it or deals with it unwisely. If that were the case, then he has no assets to call upon in the event that the appeal succeeds and he is ordered to repay the money which has been paid if no stay is ordered. As a result, I am satisfied that the appeal would be rendered nugatory if the money was paid over to Mr Wyatt under the judgment.
The second point that then has to be considered is whether the appeal has reasonable prospects of success. If reasonable prospects of success cannot be shown, then a stay will not be granted even if the appeal might be rendered nugatory if no stay is granted. Reasonable prospects of success is the test which has to be applied but this does not involve considering the whole of the case and conducting a mini‑appeal in order to resolve the issue.
In Samuels v The State of Western Australia (2005) 30 WAR 473; [2005] WASCA 193 the court considered the meaning of that phrase in a statutory context said that the ordinary meaning of the words 'reasonable prospects of success' must be taken to mean that a ground is required to have a rational and logical prospect of succeeding; that is, that it would not be rational, fanciful or absurd to envisage it succeeding in that forum; in effect, that it has a real prospect of success.
In this case the plaintiff sued for personal injuries as a result of a fall on stairs at work. The stairs consisted of one step between two levels. The stair had been there for 10 years. There had never been any evidence of any injury beforehand, although there had been a complaint about the fact that there was no handrail before the accident. Nevertheless, the appellant was found to be negligent.
The grounds of appeal have not yet been filed because the Supreme Court (Court of Appeal) Rules do not require the appellant's case to be filed until a little later but an affidavit has been filed with draft grounds of appeal. There are several draft grounds but ground 1 alleges an error in fact on the part of the trial judge in finding that the stair was a danger when the stair was a single step with 'a break and a drop of 340 millimetres between the level of the floor in the appellant's front office and the level of the floor in the appellant's workshop'. The ground alleges that there were no records of any falls or complaints in relation to the stairs since it was constructed in 1991 and prior to the appellant receiving the respondent's complaint, the respondent's credibility was of serious concern, and there are other grounds complaining that the trial judge erred in making certain findings of fact which relate ultimately to the finding of negligence that was made by the trial judge.
I am satisfied that this ground at least is not irrational, fanciful or absurd and, on that basis, it can be said that they have a real prospect of success. There are also some grounds concerning damages which I need not mention for present purposes.
Having reached that conclusion, it is then necessary to consider the balance of convenience. The balance of convenience is a difficult matter in this case because, of course, if the money is paid over and the respondent spends the money, then it will not be recoverable and the appellant will lose the money even though it succeeds in the appeal.
On the other hand, the respondent, who is entitled and has a judgment for the amount of money, is in poor financial circumstances and does require assistance one way or the other for living expenses which at the moment he is receiving by way of social security. The problem is that if a payment is made of the judgment sum, that will trigger certain consequences, the first of which is that any payments made to date will have to be repaid to Social Securities. That amount is $15,000 and it will mean that henceforth the respondent will not receive social security payments that he is presently receiving and which enables him to sustain himself.
The figure which is suggested as the amount which is necessary to sustain the respondent at current levels is $25,000 per annum and it seems appropriate therefore that provision be made at least for payment of that amount so that the respondent can sustain himself in view of the other order that I am going to make which is that a sum of money needs to be paid to fund the conduct of this appeal on behalf of the respondent but to be funded in a way which will not benefit the lawyers involved in the event that the appeal succeeds on the basis that at the moment it appears that the lawyers for the respondent are conducting the litigation on the basis of a no win/no fee basis. There is no evidence of that but when I am told that the respondent is in such a parlous financial condition, that is the only inference that can be drawn and it was not contended otherwise when I put that to the counsel for the respondent. I am satisfied that special circumstances have been shown.
I, therefore, would propose to grant a stay. I will make a suspension order, but subject to $160,000 being paid to the respondent's solicitors to be held in trust by the respondent's solicitors for the purposes of payment of legal costs associated with the appeal and on condition that the solicitors are prepared to receive that sum on the condition that if the appeal succeeds on liability, that that sum will be repaid and on condition also that $25,000 is paid to the respondent.
I recognise that that will trigger the consequences that I have mentioned which will mean that the appellant then has to pay the $15,000 to repay the social security payments already paid to date, I will give liberty to apply to the parties in case circumstances change or in case the parties by further negotiation are able to work out some method of dealing with the matter in a way that will not cause adverse consequences that might not have been foreseen by the parties in the course of dealing with this application.