Macquarie International Health Clinic Pty Limited v Sydney Local Health District

[2019] NSWCA 281

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Macquarie International Health Clinic Pty Limited v Sydney Local Health District [2019] NSWCA 281
Hearing dates:	18 November 2019
Date of orders:	21 November 2019
Decision date:	21 November 2019
Before:	Barrett AJA
Decision:	(1) Order that Orders 2, 3 and 4 made by Ward CJ in Eq on 12 September 2019 in Supreme Court proceedings 2017/83181 and enforcement of those orders be stayed until determination of the appeal initiated by Notice of Appeal filed on 25 October 2019 or until earlier order of the Court. (2) Order that the respondent pay the applicant’s costs of the stay application.
Catchwords:	PROCEDURE – judgments and orders – application for stay of orders pending appeal – no matter of principle
Cases Cited:	Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 Kalifair Pty Ltd v Digi-Tech (Australia) Ltd (2002) 55 NSWLR 737; [2002] NSWCA 383
Category:	Procedural and other rulings
Parties:	Macquarie International Health Clinic Pty Limited (appellant/applicant) Sydney Local Health District (respondent)
Representation:	Counsel: S J Philips (appellant/applicant) I M Jackman SC with him J Williams and S Scott (respondent)   Solicitors: S Moran & Co (appellant/applicant) Clayton Utz (respondent)
File Number(s):	2019/313960
Decision under appeal	Court or tribunal: Supreme Court of NSW Jurisdiction: Equity Citation: [2019] NSWSC 1199 Date of Decision: 12 September 2019 Before: Ward CJ in Eq File Number(s): 2017/83181

Judgment

1. The applicant, Macquarie International Health Clinic Pty Limited, has filed a notice of appeal in respect of a decision of the Chief Judge in Equity by which her Honour upheld the validity of notices of default and termination given by the respondent, Sydney Local Health District, under two long term leases of land of which the applicant was lessee, gave judgment for possession in favour of the respondent and granted leave to issue a writ of possession.

2. By notice of motion filed on 14 November 2019 and heard by me on 18 November 2019, the applicant seeks a stay of those orders (and, in particular, of any enforcement by taking of possession) pending determination of the appeal.

3. Each lease was granted in 1996 for a term of 103 years. Long-term and presumably valuable leasehold estates are thus apparently at stake.

4. The principles relevant to such a stay application are set out in Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685; see also Kalifair Pty Ltd v Digi-Tech (Australia) Ltd (2002) 55 NSWLR 737; [2002] NSWCA 383. Prima facie, the successful party is entitled to the benefit of the judgment obtained unless the unsuccessful party shows some positive reason why that position should be disturbed. Four questions need to be addressed in that connection.

5. The first question is whether the appeal is reasonably arguable and whether there are serious questions to be debated. The Chief Judge’s reasons run to no fewer than 493 paragraphs and cover many issues. On appeal, Macquarie advances 13 grounds which, in broad terms, relate to the proper construction of the leases and associated documents, questions of compliance with s 129 of the Conveyancing Act 1919 (NSW), and issues concerning implication of a term of reasonable co-operation.

6. At this distance, the clear impression is that arguable grounds are raised, particularly as the primary judge made clear in her reasons that she considered that the principal argument of the applicant at trial had considerable force.

7. The second question relevant to a stay is whether there is a risk that the appeal will be rendered nugatory if the appellant is successful but a stay has not been in place. As to this, the most compelling feature of the evidence before me is that the respondent has taken prompt steps towards enforcing the order for possession and obtaining execution of a writ of possession. In fact, the short time between my hearing of the motion and the giving of my decision was bridged by an undertaking of the respondent to request the Sheriff to delay such execution. It is thus sufficiently clear that the Sheriff has been put in motion and that, if there is no stay, the applicant will be put out of possession of the demised premises. That indicates a distinct possibility of loss of the subject matter from the applicant’s point of view unless there is a stay

8. The third question goes to the balance of convenience (or balance of hardship or prejudice) and requires a comparison of the positions the parties will respectively occupy if a stay is granted or a stay is not granted.

9. This third matter requires reference to further facts. The demised premises are the site of a large commercial car park operated by a third-party operator. During the currency of the parties’ litigation over more than two years, they kept in place a regime ensuring that the applicant had the ability to keep the car park operational. The stay now sought would, in practical terms, see what was then a consensual interim measure continued for a further period until the appeal is decided.

10. The respondent gives two reasons why it wishes to have immediate possession rather than awaiting the outcome of the appeal. One reason is that it wishes to enter into its own arrangement with the car park operator, its intention being that the car park should continue under the same management. The other reason is a desire to clean up the site, particularly as regards asbestos.

11. As to the respondent’s desire to make its own arrangement with the operator, all that it seems necessary to say is that, as long as the car park is kept operative until the appeal is determined, it does not seem to be a matter of great moment who it is that has the contractual relationship with the operator. Any financial adjustment can be made in due course.

12. As to the matter of asbestos removal, I was taken to a provision of a draft agreement that was discussed between the parties when they were attempting to negotiate a consensual regime that would have obviated the need for a stay. One provision would have required the applicant to commence certain asbestos removal works within 28 days. That provision never became binding and I was not taken to anything (beyond the reference to 28 days in the non-agreement) that identified any urgent requirement for those works.

13. As to the third matter, therefore, there does not seem to me to be any great prejudice to the respondent if the applicant is left in possession for the time being, but there is a prospect of demonstrable prejudice to the applicant if it is evicted.

14. The fourth matter to be considered on the stay application is the amount and significance of the judgment subject to appeal. Both the amount and significance are great in this case.

15. Having regard to all the matters to which attention must be directed, I am satisfied that a stay should be granted. There appear to be reasonably arguable grounds of appeal. There is a clear risk, from the applicant’s viewpoint, that the subject matter, being the leaseholds and the rights they embody, will be substantially destroyed if there is no stay. The balance of convenience favours an extension of the de facto position under which the parties have existed for several years. The amount and significance of the judgment are great.

16. The Court makes the following orders:

1. Order that Orders 2, 3 and 4 made by Ward CJ in Eq on 12 September 2019 in Supreme Court proceedings 2017/83181 and enforcement of those orders be stayed until determination of the appeal initiated by Notice of Appeal filed on 25 October 2019 or until earlier order of the Court.

2. Order that the respondent pay the applicant’s costs of the stay application.

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Decision last updated: 22 November 2019