Marks-Isaacs v Gunns Finance Pty Ltd (Receivers and Managers Appointed) (In liq)

[2016] NSWCA 315

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Marks-Isaacs v Gunns Finance Pty Ltd (Receivers and Managers Appointed) (In liq) [2016] NSWCA 315

Hearing dates:

16 November 2016

Decision date:

16 November 2016

Before:

Basten JA

Decision:

1.   Dismiss the application for a stay of the enforcement of the judgment debt the subject of these proceedings.

 

2.   Stand the applicant’s notice of motion, filed on 16/11/16, over to allow the applicant an opportunity to renew the application for a stay on the basis of such further material as may become available.

 3.   Costs of today to be costs in the motion for a stay.

Catchwords:

PRACTICE AND PROCEDURE – stay – application to stay enforcement of judgment debt pending appeal – whether reasonably arguable basis for seeking leave to appeal – whether stay prejudicial to judgment creditor – judgment debt basis of bankruptcy proceedings in Federal Court – whether balance of prejudice favours stay

Category:

Procedural and other rulings

Parties:

Simon Marks-Isaacs (Applicant)
Gunns Finance Pty Ltd (Receiver and Managers Appointed (In liq) (Respondent)

Representation:

Solicitors:
Applicant self-represented
Ms P Kastanias, TurksLegal (Respondent)

File Number(s):

2016/342585

 Decision under appeal 

Court or tribunal:

District Court

Jurisdiction:

Civil

Date of Decision:

11 November 2016

Before:

Judge P Taylor SC

File Number(s):

2014/112914

Judgment

1. BASTEN JA: On 14 April 2014 Gunns Finance Pty Ltd (Receivers and Managers Appointed) (in liq), commenced proceedings in the District Court against the present applicant, Simon Marks-Isaacs, to recover a loan and unpaid interest. The applicant had at one stage foreshadowed a cross-claim but none eventuated. Gunns' claim was listed for hearing on 2 April 2015 but the applicant did not appear. Taylor DCJ gave judgment in favour of Gunns.

2. The orders made on that occasion were in the following terms:

1.   Judgment in favour of the plaintiff for the sum of $194,986.90.

2.   Defendant to pay the plaintiff's costs of proceedings on an indemnity basis.

3.   Order the plaintiff to notify the defendant of these orders by letter sent to the defendant's address for service to be posted on or before 9 April 2015.

4.   To the intent that any entitlement of the defendant to set aside these orders be preserved if there exists a good cause for his absence today, entry of these orders to be stayed for 28 days.

3. What took place thereafter is not apparent from the material before this Court. The next known date is that on 4 October 2016 the applicant filed a notice of motion seeking to have the judgment set aside. That application came before Taylor DCJ on 11 November 2016; the applicant's motion was dismissed with costs.

4. Although the facts have not been properly established by affidavit, given the urgency with which the matter has been listed this morning, the Court is informed, and it appears to be common ground, that the application to set aside the judgment followed the issue and service on the applicant of a bankruptcy notice issued by Gunns. That notice was served on some date in September.

5. The applicant sought to set aside the bankruptcy notice and there are proceedings on foot in the Federal Court in relation to that application. Those proceedings have been adjourned on more than one occasion and are listed before the registrar later this morning.

6. Mr Marks-Isaacs' application is for a stay of the orders made on 2 April 2015. The application is supported by an affidavit dated 15 November 2016 which was read by the applicant. Paragraph 10 of that affidavit states that “the appeal involves a question with regard to a matter of law and includes but is not limited to matters of procedural fairness and natural justice.”

7. In order to grant a stay of the judgment, the stay being opposed by the judgment creditor, I need to be satisfied that there is a reasonably arguable basis for seeking leave to appeal, which in effect means that the proceedings in the District Court were attended by some procedural error or that the applicant has an arguable defence to the liquidated debt claim.

8. The affidavit did not specify what might be put in relation to either of those grounds, but one matter raised by the applicant in submissions was that the application to set aside had been determined by the same judge who gave the default judgment. On its face I would not accord that argument weight. There is no reason why an application to set aside a default judgment should not come before the judge who made it and who, as appears from the reasons given on 2 April 2015, was anxious to ensure that the absence of the applicant on that occasion was not properly excusable or explicable. Hence the terms of order 4, referred to above at [2].

9. The applicant also says that his absence was due to two causes, one of which was that he had no notice of the hearing listed for 2 April; the other being that he was absent because he understood that the claim against him was to be dealt with as part of a hardship programme being administered by Gunns. He also says that he had a valid defence to the claim although no detail has been given as to what that might be.

10. So far as I can tell from the information supplied by the parties from the Bar table, these issues were agitated before Taylor DCJ on 11 November. Taylor DCJ, in dismissing the application, gave oral reasons but there is no copy of those reasons available to this Court today. Further, neither party has put before this Court by way of affidavit what might have been the substance of those reasons. That could have been done and it might have been of assistance to the Court. At the moment I have no basis for thinking that there was any procedural error or any substantive mistake made by the judge in dismissing the application to set aside the judgment and it is that judgment from which leave to appeal is sought.

11. The question of prejudice is not one which is ultimately decisive in this case. Ms Kastanias, who appeared for the judgment creditor, noted that with each delay the judgment creditor is incurring further enforcement costs and that interest is also accruing. There is no evidence before me as to the ability of the applicant to pay the amount presently outstanding nor do I know precisely what that amount is. I take account of the fact, though, that any delay is likely to cause some further risk of unenforceable costs to the judgment creditor.

12. On the other side, the applicant insists that failure to stay an enforcement of the judgment will cause him significant and important prejudice. No doubt it is true that if the judgment remains on foot it will continue to be the basis on which bankruptcy proceedings may be pursued in the Federal Court. However, I am not persuaded that those proceedings have reached a stage at which irreparable harm will be caused in the immediate future. So far as I can tell the only thing that is likely to happen if no stay is granted today is that his application to set aside the bankruptcy notice, which is dependent upon his challenge to the judgment debt in the District Court, may be dismissed. It may also be adjourned. That is not a matter which I am able to assess nor is it appropriate that I make any comment in that regard. Assuming, however, against the applicant's interests, that his application is dismissed, it will still be necessary for the judgment creditor to bring proceedings in order to obtain a sequestration order.

13. The immediate prejudice which is sought to be avoided by having the matter listed this morning, in circumstances which are unsatisfactory from the perspective of both parties, is not established.

14. I propose to refuse the stay application. However, I would not be inclined to dismiss the notice of motion at this stage. I would give the parties liberty to apply on the basis that if the applicant can provide evidence demonstrating that there has either been an arguable procedural error in the District Court or that he has a valid defence which has not been considered in the District Court, then it would be open to him to do so and the stay application could be re-agitated.

15. Accordingly, the only order that I would make is to refuse to grant the stay of enforcement sought in the notice of motion filed in the registry today but without prejudice to the applicant re-agitating his application on further material with notice to the respondent.

16. There remains a question as to the costs of today. As I do not intend to dismiss the notice of motion, which the applicant may seek to renew when the reasons of the District Court judge are available and on the basis of such further evidence as he may be able to muster, it is appropriate that the costs of today be costs in the motion for a stay.

17. I use those terms because the notice of motion also sought leave to appeal. As I indicated at the outset of the hearing today, that is not a matter which can be dealt with by me and it would in any event only be addressed when the summons seeking leave to appeal is listed for hearing.

18. Accordingly, I make the following orders:

1.   Dismiss the application for a stay of the enforcement of the judgment debt the subject of these proceedings.

2.   Stand the applicant's notice of motion filed on 16 November 2016 over to allow the applicant an opportunity to renew the application for a stay on the basis of such further material as may become available.

3.   Costs of today to be costs in the motion for a stay.

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Decision last updated: 22 March 2018