Meetfresh Franchising Pty Ltd v Ivanman Pty Ltd

[2020] NSWCA 27

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Meetfresh Franchising Pty Ltd v Ivanman Pty Ltd [2020] NSWCA 27
Hearing dates:	24 February 2020
Date of orders:	26 February 2020
Decision date:	26 February 2020
Before:	Macfarlan JA
Decision:	(1)   Stay until disposition of the appeal the judgment for $113,171 and order for costs of Robison DCJ of 13 November 2019, subject to the appellant Meetfresh Franchising Pty Ltd paying the amount of $113,171 into Court within 14 days of the date of this judgment to abide the result of the appeal.  (2)   Order that the costs of the motion for a stay be costs in the appeal.
Catchwords:	APPEAL – application for stay – doubts about financial position of both appellant and respondent – stay ordered subject to payment of judgment sum into court within 14 days
Cases Cited:	Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685
Category:	Procedural and other rulings
Parties:	Meetfresh Franchising Pty Ltd (Appellant) Ivanman Pty Ltd (Respondent)
Representation:	Counsel: A Hopkins (Appellant) R W Tregenza (Respondent)   Solicitors: Mistry Fallahi Lawyers (Appellant) Sunfield Chambers Solicitors & Associates (Respondent)
File Number(s):	2019/389053
Decision under appeal	Court or tribunal: District Court Jurisdiction: Civil Date of Decision: 13 November 2019 Before: Robison DCJ File Number(s): 2018/20635

Judgment

1. HIS HONOUR: This is an application for a stay pending appeal of orders made by Robison DCJ on 13 November 2019. In the action brought in the District Court by the present first respondent (“Ivanman”) against the appellant (“Meetfresh”) his Honour directed the entry of judgment in favour of Ivanman in the sum of $113,171 and ordered that Meetfresh’s cross-claim be dismissed. Meetfresh’s appeal is fixed for hearing on 11 May 2020.

2. Meetfresh’s stay application is founded on its contention that there is a real risk that if it paid the judgment debt to Ivanman it would be irrecoverable if the appeal succeeded.

3. In my view Meetfresh established the existence of that risk. It is sufficient to note in this regard that in the most recent financial statements of Ivanman in evidence (those as at 30 June 2017), Ivanman is shown as having a deficiency of assets over liabilities of $92,171.79 and a loss for the year on its ordinary activities of $76,334.49.

4. Whilst it is not necessary for the grant of a stay that special or exceptional circumstances be demonstrated, it is necessary for an applicant to demonstrate a reason why a stay should be granted (Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 694-5). The risk to which I have referred constitutes such a reason in the present case.

5. As to the terms of a stay, it is significant that the evidence before me also establishes that Ivanman might well encounter a difficulty in enforcing its judgment against Meetfresh if and when Ivanman is permitted to do so.

6. In this respect, it is sufficient to say that Meetfresh’s financial statements show that significant changes occurred in its financial position between 30 June 2018 and 30 June 2019 and that there is no evidence as to what has occurred since. By way of example, as at 30 June 2018, Meetfresh had total assets of $6,160,715.48 and total liabilities of $5,905,608.41, whereas the corresponding figures at 30 June 2019 were $702,278.16 and $439,591.96. Whilst the net assets remained similar on each date ($255,107.07 and $262,686.20) little explanation is provided in the financial statements for these significant changes. There is for example no explanation as to why cash and cash equivalents decreased from $177,473.12 to $23,088.81, or as to why receivables decreased from $5,702,430.36 to $398,377.35. Further uncertainty as to Meetfresh’s financial position is created by the absence of any post 30 June 2019 information, particularly when costs would have been incurred in relation to the substantial District Court hearing in November 2019 before Robison DCJ.

7. To ensure that Ivanman is not prejudiced by a delay in it being able to enforce its judgment as a result of the grant of a stay, the stay should be subject to Meetfresh paying the amount of the judgment into Court. I note that although counsel for Meetfresh argued that, as a matter of inference from the financial evidence before the Court, a need for his client to pay the judgment sum before the conclusion of the appeal would be likely to cause it extreme inconvenience, there was no evidence (and therefore no submission) that the appeal would be stultified if Meetfresh were obliged to do this.

8. For these reasons, I make the following orders:

1. Stay until disposition of the appeal the judgment for $113,171 and order for costs of Robison DCJ of 13 November 2019, subject to the appellant Meetfresh Franchising Pty Ltd paying the amount of $113,171 into Court within 14 days of the date of this judgment to abide the result of the appeal.

2. Order that the costs of the motion for a stay be costs in the appeal.

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Decision last updated: 26 February 2020