McLean Tecnic v Digi-Tech; Kalifair P/L v Digi-Tech

[2002] NSWCA 352

CITATION:	McLean Tecnic & ors v Digi-Tech; Kalifair P/L & Ors v Digi-Tech & Ors [2002] NSWCA 352 revised - 4/06/2003
FILE NUMBER(S):	CA 40840 of 2002; 40838 of 2002
HEARING DATE(S):	14/10/02
JUDGMENT DATE:	17 October 2002
PARTIES :	McLean Tecnic Pty Limited & Ors v Digi-Tech (Australia) Limited & Ors Kalifair Pty Limited & Ors v Digi-Tech (Australia) Limited & Ors
JUDGMENT OF:	Meagher JA at 1

LOWER COURT JURISDICTION :	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S) :	ED 50087 of 2000 ED 50169 of 1999
LOWER COURT JUDICIAL OFFICER :	Einstein J

COUNSEL:	A: A J Meagher SC & R A Dick R: M Christie & Sloan
SOLICITORS:	A: Atanaskovic Hartnell R: Blake Dawson Waldron
CASES CITED:	P S Chellaram & Co v China Ocean Shipping Co (1991) 65 ALJR 642 Sali v SPC Ltd (1993) 67 ALJR 515
DECISION:	Both applications dismissed with costs.

CA 40840 of 2002
CA 40838 of 2002

MEAGHER JA

Thursday, 17 October 2002

McLEAN TECNIC PTY LIMITED & Ors v DIGI-TECH (AUSTRALIA) LIMITED & Ors

KALIFAIR PTY LIMITED & Ors v DIGI-TECH (AUSTRALIA) LIMITED & Ors

Judgment

1 MEAGHER JA: These are two applications for a stay of execution on a judgment entered by Einstein J in favour of the opponents against the claimants. The judgments arose out of extensive litigation (resulting in a written judgment in excess of 800 pages), the result of which may be stated (with approximate accuracy) as follows:

Kalifair has a judgment against it in favour of Digi-Tech (Australia) Limited in an amount in excess of $12 million.

Kalinick Pty Limited (which I gather is an associated company of Kalifair) has a judgment against it in favour of Digi-Tech (Australia) Limited in an amount in excess of $6 million.

McLean Tecnic Pty Limited has a judgment against it in excess of $24 million in favour of Digi-Tech (Australia) Limited.

A I McLean Pty Limited has a judgment against it in favour of Digi-Tech (Australia) Limited in a sum in excess of $24 million.

2 The four debtor companies have lodged appeals against his Honour’s judgment.

3 The stay applications were, by consent, heard together. Learned counsel for the claimants (the debtor companies) were Mr A J Meagher SC and Mr R A Dick; learned counsel for the creditor companies was Mr M Christie.

4 The following facts were agreed (or, at least, not seriously disputed):

(a) Neither Kalifair nor Kalinick nor McLean Tecnic have any assets at all, but AI McLean has assets of about $1.7million. None of the four debtor companies is in a position to comply with the judgments, stay or no stay. (This is the contrary of the usual evidence in a stay application, where the claimant is determined to prove the opponents impecuniosity, not its own).

(b) There is no evidence of the financial position of the persons standing behind the claimants, a factor which is of considerable importance in the roughly analogous situation of applications for security for costs: see P S Chellaram & Co v China Ocean Shipping Co (1991) 65 ALJR 642.

(c) If no stay be granted, it is in the nature of things that the creditor companies will move for the sequestration of the debtor companies.

(d) The claimant companies have a good prima facie case for arguing that his Honour the trial judge fell into error.

(e) The opponent creditor companies will suffer no prejudice if a stay were granted.

5 It might be thought that a combination of the fourth and fifth factors I have listed above would ensure the victory of the claimant companies in this stay applicaton. However, my attention has been drawn to the decision of Brennan J in Sali v SPC Ltd (1993) 67 ALJR 515, which would seem to require me to hold that in a case like the present a stay is not necessary to preserve the claimants’ property (i.e. their appellate rights), because these rights exist, stay or no stay; whilst the existence of an appeal is always a factor which can be taken into account by any Court dealing with an attempt to sequestrate the claimant companies. Although I am not bound to follow that decision as a matter of stare decisis, I do think it ought be followed in this Court.

6 The claimants’ case is put, in an affidavit by Mr G L Brand, in the following way:

7 By reason of the matters referred to at paragraphs 3 to 6 above I verily believe that:
(a) the refusal of the stay application may render any success enjoyed by the First and Second Appellants on the hearing of the appeal nugatory, or alternatively prevent the prosecution of the appeal; and
(b) damages may not be an adequate remedy.

7 The factors to which sub-paragraph (a) refer are factors which, according to Brennan J, simply do not exist. As to the factor referred to in sub-paragraph (b), there was neither evidence nor argument on the point.

8 In conclusion, I am of the view, although with some hesitation and considerable regret, that both applications should be dismissed with costs.

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