Menzies v Paccar Financial Pty Ltd

[2013] NSWCA 283

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Menzies v Paccar Financial Pty Ltd [2013] NSWCA 283

Hearing dates:

26 August 2013

Decision date:

30 August 2013

Before:

Leeming JA

Decision:

(1) Extend the existing stays of the money orders and the possession orders (being orders 1, 2, 3 and 5 made on 13 June 2013) until 5pm on Monday 23 September 2013.

(2) Subject to (4) below, the money orders (being orders 3 and 5 made on 13 June 2013), be stayed until 28 days after the determination of the appeal, on terms that Mr and Mrs Menzies are to prosecute the appeal with reasonable diligence.

(3) Subject to (4) below, upon the undertaking by Paccar to the Court that, upon delivery to it of the equipment referred to in order 1 made on 13 June 2013, it will store and keep the equipment exercising care as would be required of a bailee of similar goods and that it will deliver the goods in accordance with the order of the Court, orders 1 and 2 made on 13 June 2013 are effective and may be enforced on and after 24 September 2013.

(4) The parties may apply, on three business days' notice, to be heard further in relation to orders 2 and 3 above.

(5) The costs to date of the Notice of Motion filed 29 June 2013 and the Amended Notice of Motion filed 21 August 2013 be costs of the appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

PROCEDURE - application for stay pending appeal - unrepresented appellants - application for adjournment in order to obtain legal representation - real chance that legal representation may be obtained in imminent future - adjournment and extension of existing stay granted - provisional regime pending determination of appeal ordered, as to which the parties may apply to be heard further

Legislation Cited:

Bankruptcy Act 1966 (Cth)
Civil Procedure Act 2005
Contracts Review Act 1980
Corporations Act 2001 (Cth)
Independent Contractors Act 2006 (Cth)
Industrial Relations Act 1996 (NSW)
Uniform Civil Procedure Rules

Cases Cited:

Alexander v Cambridge Credit Corporation Ltd (Receivers appointed) (1985) 2 NSWLR 685
Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164
Bi v Mourad [2010] NSWCA 17
Boutros v Nationwide Capital Pty Ltd [2013] NSWCA 246
BP Australia Pty Ltd v Menzies [2010] FMCA 375
Kalifair Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737
Menzies v Paccar Financial Pty Ltd [2011] FCA 460
National Australia Bank Ltd v New South Wales [2009] FCA 1066; (2009) 182 FCR 52
National Australia Bank Ltd v State of Victoria [2010] FCA 1230
Re Middle Harbour Investments Ltd [1977] 2 NSWLR 652
Re Willmott Forests Ltd (Recs and Mgrs apptd) (in liq) [2012] VSCA 202; (2012) 91 ACSR 182
Sandtara Pty Ltd v Abigroup (1996) 42 NSWLR 491
Vaughan v Dawson [2008] NSWCA 169

Category:

Procedural and other rulings

Parties:

Ian David Menzies (First Applicant) (In Person)
Colleen Anne Menzies (Second Applicant) (In Person)
Paccar Financial Pty Ltd (Respondent)

Representation:

Counsel:
R Tregenza (Respondent)
N Kidd SC (Amicus Curiae)
Solicitors:
Mills Oakley Lawyers (Respondent)

File Number(s):

2013/153139

 Decision under appeal 

Citation:

Paccar Financial Pty Ltd v Menzies; Menzies v Paccar Financial Pty Ltd (No 3) [2013] NSWSC 551; Paccar Financial Pty Ltd v Menzies; Menzies v Paccar Financial Pty Ltd (No 4) [2013] NSWSC 743; Paccar Financial Pty Ltd v Menzies; Menzies v Paccar Financial Pty Ltd (No 5) [2013] NSWCA 772

Before:

Harrison AsJ

File Number(s):

2010/377702; 2011/176144

Judgment

1. The applicants, Mr and Mrs Menzies, seek a stay of final orders made by Harrison AsJ, from which they have appealed as of right. Their application was to be heard on 26 August 2013, however, in the circumstances described below, I heard Mr and Mrs Menzies' application to adjourn the hearing of their application for a stay. The effect of this decision is to give Mr and Mrs Menzies a further, relatively short period during which the orders will be stayed. However, in light of the fact that I have also heard and read much relating to the underlying stay which Mr and Mrs Menzies seek, and in compliance with the obligations imposed by ss 56-60 of the Civil Procedure Act 2005, I will also make orders, flagged by me at the hearing, whose provisional effect will be to stay some but not all of the orders pending the determination of the appeal. Those latter orders are provisional because I am conscious that neither party has been fully heard in relation to them. If either party wishes to be heard further in relation to those provisional orders, there is liberty to do so within the next three weeks.

Procedural background

1. Mr and Mrs Menzies' pending appeal extends to three decisions made by Harrison AsJ, one on 14 May and two on 13 June 2013. The first was her Honour's refusal, at the commencement of a hearing, which had been set down for five days, to vacate it: [2013] NSWSC 551. The second was her Honour's refusal, to permit Mr and Mrs Menzies to re-open the hearing immediately before judgment was handed down one month later: [2013] NSWSC 743. The third is the substantive judgment, [2013] NSWSC 772, which followed the final hearing (on 14 May 2013) in the absence of Mr and Mrs Menzies, in which her Honour made these orders in proceeding 2010/377702:

1. Paccar is entitled to possession of [two prime movers and two trailers each identified by its registration number].

2. Ian Menzies and Colleen Menzies are to deliver the property referred to in order 1 to Paccar within 14 days.

3. The defendants are to pay the plaintiff the sum of $572,442.96.

4. The cross claim is dismissed.

5. The defendants are to pay the plaintiff's costs on an indemnity basis.

It will be convenient to refer to orders 1 and 2 as the "possession orders" and orders 3 and 5 as the "money orders". Her Honour determined that the owner of the prime movers and trailers, Menzies Haulage Pty Ltd (Menzies Haulage), had defaulted on obligations pursuant to four (identical) loan agreements (one for each prime mover and trailer) between it and the plaintiff/respondent (Paccar) as a result of which Paccar had a right to possession under four (identical) charges it had obtained: [2013] NSWSC 772 at [17] and [120]. Her Honour found that the Federal Court ordered that Menzies Haulage be wound up on 3 September 2009, and that its liquidator disclaimed all interest in and to the prime movers and trailers: at [77]-[78]. The possession orders made by her Honour reflected an exercise of power under s 568F(1)(a) of the Corporations Act 2001 (Cth) that disclaimed property be vested in, or be delivered to, Paccar, as "a person entitled to the property". As for the balance of the orders, her Honour found that Mr and Mrs Menzies had guaranteed the obligations of Menzies Haulage, and so were personally liable to Paccar: at [120]. Her Honour dismissed a cross-claim which had been based on allegations that there had been misleading and deceptive conduct and that the guarantee was an "unjust contract" for the purposes of the Contracts Review Act 1980. The order for costs on an indemnity basis was based on rights which her Honour found Paccar enjoyed under the loan agreements: at [121].

1. Twelve days after those orders were made, the proceedings came before Rothman J, as duty judge, on an application for a stay pending the determination of an appeal. In ex tempore reasons delivered on the same day, his Honour distinguished between the possession orders and the money orders.

1. His Honour expressed the view that there did not seem to be an arguable case on the possession of the trucks, even taking account of the material that Mr Menzies had put from the Bar table. The essential problem as perceived by his Honour was that the owner of the trucks had been Menzies Haulage, whose liquidator had disclaimed any interest in the trucks, and which company had subsequently been deregistered. His Honour refused a stay of the possession orders.

1. His Honour formed a different view of the money orders. His Honour outlined a jurisdictional argument, based on the Independent Contractors Act 2006 (Cth), which he said fell within the exclusive jurisdiction of the Federal Court or the Federal Circuit Court. His Honour said that if that Act did not apply, then the Industrial Relations Act 1996 (NSW) would, which again might lead to a want of jurisdiction. In addition to that, his Honour expressed the view that:

"[O]n the material that is before me ... there is a sufficiently arguable case on procedural fairness. That is that her Honour erred in the exercise of her discretion relating to the adjournment [viz, the refusal to vacate the hearing date]."

His Honour granted an interim stay of the money orders to operate until 21 September 2013, on the basis that within that time the matter would be dealt with by the Court of Appeal.

1. Finally, his Honour formed the view that it was in the interests of the administration of justice for Mr and Mrs Menzies to obtain legal assistance and accordingly referred the matter to the Registrar for that purpose.

1. The matter came before me on 15 July 2013 on Mr and Mrs Menzies' further application for a stay of the possession orders. Mr and Mrs Menzies had not at that stage obtained legal assistance. Although the possession orders had not been complied with, and Paccar had threatened prosecuting for contempt, by consent they were stayed until Monday 26 August 2013, and directions were made for the service of evidence and submissions on the application for both a stay of the possession orders and a further stay of the money sum orders. The existing limited stay of the money orders meant that, unless the parties could reach agreement, it would be necessary for there to be a further interlocutory hearing in any event. I made orders designed to achieve the goal that there be only one further interlocutory hearing to resolve the position pending the hearing of the appeal. For that reason, the directions included a note that "both parties' evidence and submissions should address the terms of any further stay on the money judgment in order 3 made on 13 June 2013".

1. Those directions were only complied with in part. In accordance with the first direction, counsel then appearing for Paccar supplied short submissions setting out his client's entitlement to possession of the trucks. Mr and Mrs Menzies were directed to file and serve within 21 days their evidence and submissions in support of their motion. Ultimately, their written submissions, accompanied by some evidence, were supplied by email on the evening of Sunday 25 August, the day before the hearing. Paccar for its part did not comply with the direction to file and serve evidence and submissions by 12 August 2013, although it (in my view understandably) took the view that there was little point doing so until it had seen Mr and Mrs Menzies' evidence and submissions. Neither party caused the matter to be re-listed before the Court despite the non-compliance. To the contrary, the parties agreed to vacate a scheduled directions hearing before the Registrar on 21 August 2013.

The hearing on 26 August 2013

1. There were two developments on the day of the hearing (26 August 2013). The first was the appearance, as amicus curiae, of Mr Kidd SC, who had received some papers from the Bar Association late the previous week, and was in a position to advance short, oral submissions based on Division 7A of Part 5.6 of the Corporations Act dealing with disclaimer of onerous property. The second was Mr and Mrs Menzies' application for an adjournment, for a period of six weeks or such other time as seemed appropriate, of the hearing of their application for a stay pending appeal. The basis of that application was the efforts in recent weeks they had gone to to obtain the benefit of legal assistance, which, so they said, were only then beginning to bear fruit.

1. With the agreement of the parties, I first heard Mr Kidd, whose submissions Mr and Mrs Menzies adopted when they heard them, and then heard Mr Tregenza in response (following which Mr Kidd was excused) before turning to the application for an adjournment.

1. Mr Kidd pointed to the terms of the four identical Deeds of Loan and Charge between Paccar and Menzies Haulage, whose charging clauses charged the "Secured Property", defined to be not the prime movers and trailers themselves, but "the Borrower's rights, property and undertakings in respect of [the relevant prime mover or trailer]". The charges gave a contractual right of possession of the Secured Property where there was an Event of Default, which included non-payment of amounts by Menzies Haulage. The question raised by Mr Kidd was as to the effect of the liquidator's disclaimer upon the rights under the charges. Although the precise terms of that disclaimer are not in evidence before me, Mr Kidd's submission was that the Court should proceed on the basis that it was effective, many months before her Honour's order under s 568F(1)(a), which order failed to pay regard to s 568D. That provision is in the following terms:

"A disclaimer is taken to have terminated, as from the day on which it is taken because of subsection 568C(3) to take effect, the company's rights, interests, liabilities and property in or in respect of the disclaimer property, but does not affect any other person's rights or liabilities except so far as necessary in order to release the company and its property from liability."

1. Mr Kidd submitted, by reference to Re Willmott Forests Ltd (Recs and Mgrs apptd) (in liq) [2012] VSCA 202; (2012) 91 ACSR 182 at [37], that the word "liability" in s 568D(1) should be given the "widest possible meaning". In that case, which involved the disclaimer of certain long term leases of land on which timber was being grown and harvested, "liability" was held to include the obligation to provide possession and quiet enjoyment, eliminating the tenants' proprietary interest. Warren CJ and Sifris AJA said at [37] that the consequence of disclaimer was that:

"The tenure must go. It is necessary to affect the Growers rights (tenure) in order to release [the company] from its liability (possession and quiet enjoyment)."

1. Mr Kidd's essential point was that the consequence of the liquidator disclaiming Menzies Haulage's interest in the chattels, thereby relieving the company of the obligations in respect of them, including obligations under the charge (for example, to keep in place insurance and registration), was that the other contractual rights granted by Menzies Haulage to Paccar, including the right to possession, "must go", no differently from the disclaimed leases in Re Willmott Forests. It followed that Paccar was not a person "entitled" within the meaning of s 568F(1)(a). In any event, he submitted that her Honour had not addressed the matters required by the section before making the vesting order.

1. Against this, Mr Tregenza for Paccar maintained that a disclaimer could not undermine the security of a secured creditor. His example was National Australia Bank Ltd v State of Victoria [2010] FCA 1230, where it was held that although following disclaimer by a trustee in bankruptcy there was no personal covenant upon which the bank as mortgagee could take action, the bank continued to be able to exercise accrued rights and if necessary could be the subject of a vesting order in order to give effect to those rights.

1. Mr Tregenza also indicated that he had instructions to proffer an undertaking in relation to the prime movers and trailers the subject of the possession orders, which I have been told have for some time been stored by Mr and Mrs Menzies on their land. That undertaking was formalised on 28 August in accordance with directions of the Court. It is in these terms:

"In the event that the Court is of the view that the appellants' prospects of success on appeal in relation to the Order for possession of the equipment otherwise supports the continuance of the stay then the respondent offers an undertaking in the form below:

The respondent undertakes to the Court that upon delivery to it of the equipment referred to in the Schedule it will store and keep the equipment exercising care as would be required of a bailee of similar goods and that it will deliver the goods in accordance with the Order of the Court."

(The Schedule was, as I understood it, intended to identify the prime movers and the trailers.)

1. Thereafter, I received evidence from Mr and Mrs Menzies in support of their application for an adjournment, and I heard from them, and Mr Tregenza (who opposed it) and from Mr and Mrs Menzies in reply.

1. Pursuant to a direction made at the request of Mr Tregenza to supply further submissions on ss 568D and 568F, I received further written submissions from him on Wednesday relating to the operation of the disclaimer provisions. I also received a short submission, on the same topic, from Mr Kidd. Yesterday afternoon, I received a ten page submission from Mr and Mrs Menzies, with 15 pages of annexures, purportedly pursuant to the same direction, but ranging over the entire subject matter of the dispute. Part of that submission is within the scope of the direction, insofar as it addresses the operation of the Corporations Act. The majority of it is not. It includes an application for leave to issue a subpoena, a submission that nine affidavits listed on pages 4-5 of the amended notice of motion (including one which is "still being prepared") be relied upon, some submissions about a series of factual matters relevant to the adjournment, and a range of submissions directed to the underlying merits of Mr and Mrs Menzies' appeal. I have not relied upon the affidavits referred to in that submission; to do so would be patently unfair. The draft subpoena is unrelated to the issues presently before me. I refer to some of the factual matters mentioned in the submission below.

Consideration

1. Not lightly ought an application for an adjournment of a hearing, made on the day of the hearing, be acceded to. I am conscious that applications for adjournments made by Mr and Mrs Menzies have been a recurring theme in the litigation at first instance between these parties. The procedural history, set out in detail in Harrison AsJ's reasons in [2013] NSWSC 551 at [12]-[24], is unfortunate, to say the least. Her Honour recorded that the trial set down before her had been vacated twice on the application of Mr and Mrs Menzies, that the proceedings had been before the Court on at least 18 occasions, and that on 22 March 2013, Garling J had said:

"HIS HONOUR: Mr Menzies, I recall vividly what is going on and the reason I made orders was so that this case can finally come for hearing in circumstances where the hearing date has been vacated twice and it is time that the Court requires you to put on all of your evidence. ... This case will go ahead on 13 May. There will be no adjournments."

1. Sections 56-60 of the Civil Procedure Act impose obligations on the parties, their lawyers, and the Court. Every adjournment detracts from the efficiency and cheapness of litigation. Every adjournment causes irrecoverable cost to Paccar and, indirectly, to other litigants in the Court. Section 59 requires the implementation of practice and procedure with the object of eliminating time between the commencement of the appeal and its final determination other than time which is reasonably required for interlocutory activities necessary for the fair and just determination of the issues between the parties. As Allsop P said in Bi v Mourad [2010] NSWCA 17 at [47], cases need to be dealt with expeditiously if they are to be dealt with justly.

1. Of especial importance, in my view, to the present application, is the command in s 60 of that Act:

"In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute."

1. That section has an important application in relation to applications for leave involving amounts below the statutory threshold: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [39]. In my opinion, s 60 also has an important application here, where what is at stake is the timing of a hearing as to a stay pending appeal. Much more important than the timing of that hearing is its outcome, and much more important than either is the determination of the appeal itself, which after all is the purpose of and the reason for the interlocutory application.

1. Obviously, those considerations are counterbalanced by what fairness requires in a particular case. There seem to me to be three quite unusual circumstances pointing in favour of the adjournment Mr and Mrs Menzies seek. The first is that a judge has expressed the view in his reasons that the matter warrants a referral for pro bono legal assistance, identifying matters which in his preliminary view are seriously capable of argument, and for reasons the correctness of which I cannot fully assess, Mr and Mrs Menzies claim that they have not to date enjoyed what was contemplated by and what they expected from that referral. The second is that Mr and Mrs Menzies amply demonstrated that in the weeks leading up to 26 August 2013, they had been assiduously taking steps to obtain legal assistance. I should summarise those steps below.

(1)   Mr and Mrs Menzies were dissatisfied by the immediate outcome of the Court's referral (which apparently was a prompt summary of advice from junior counsel in his first year at the Bar, who was unwilling to appear without a solicitor).

(2)   Mr and Mrs Menzies applied earlier in August to the Pro Bono and Community Services branch within the Law Society (letters and emails of 5, 6, 16, 21 August 2013).

(3)   Mr and Mrs Menzies also applied in August to the New South Wales Bar Association's Legal Assistance Referral Scheme (application made 5 August, further correspondence 12, 13, 15, 20, 21 August 2013).

(4)   Mr and Mrs Menzies tendered documents suggesting that they applied in late July and early August for pro bono assistance from four well-known law firms, which had to date been unsuccessful.

(5)   For what it is worth, Mr Menzies said from the Bar table that he had also spoken with a barrister whom he had formerly retained, and solicitors who were prepared to act for him, and conveyed the impression to me that a retainer was imminent.

1. I would not want it to be inferred that merely engaging in substantial communication with law firms and professional organisations would constitute a basis for an adjournment; in my view it would not. I am rather more persuaded by the documents tendered by Mr and Mrs Menzies than what is said from the Bar table. However, the most persuasive consideration, to my mind, by far is that it appears that Mr and Mrs Menzies' own application to the Bar Association has led, albeit belatedly, to the appearance of Senior Counsel, and the advancing of arguments which in my view cannot be dismissed out of hand. Indeed, counsel for Paccar (who of course had only had very limited notice of the points) asked for time to consider and respond to them, and has now done so in writing.

1. In short, although the procedural history of this appeal and the proceedings at first instance contains much that is regrettable, a consideration in favour of the adjournment sought by Mr and Mrs Menzies is that it may enable them to enjoy the benefit of representation which was contemplated by Rothman J. That benefit, of course, is not confined to them, but includes a benefit to Paccar and to the Court. On the material before me, the chance of that occurring is real.

1. As it happened, the delayed start of the hearing (at 2.15pm, to suit the convenience of Mr and Mrs Menzies), the appearance of Mr Kidd as amicus, the desire by counsel for Paccar for 48 hours to respond further to Mr Kidd's submissions and to supply a formal undertaking, and my desire to reflect on what he had said, led, shortly before 5pm, to Mr and Mrs Menzies in effect obtaining by default a short adjournment when I reserved my decision and extended the existing stay until today.

1. In my view the resolution of the adjournment application before me is informed by the following considerations.

1. First, although a great deal of the Court's and the parties' time has been consumed so far, it is to be realised that the purpose of the stay application brought by Mr and Mrs Menzies is merely to determine, on an interlocutory basis pending the hearing and resolution of their appeal, a holding position in relation to the possession orders and the money orders. Sections 59 and 60 of the Civil Procedure Act require me to attempt to resolve the interlocutory disputes between the parties as efficiently as may be done, consistently with fairness. I think that it is appropriate that I attempt to assess, as best I can, the outcome of the underlying interlocutory dispute, and not merely the application for its adjournment, if I can do so in a way that is fair to the parties.

1. Secondly, the principles applicable to a stay of execution pending appeal are familiar and uncontroversial. In Alexander v Cambridge Credit Corporation Ltd (Receivers appointed) (1985) 2 NSWLR 685 the Court said that "special or exceptional circumstances" did not need to be made out, and that it was sufficient that the applicant demonstrated "a reason or an appropriate case to warrant the exercise of discretion" in the applicant's favour: at 694. On the other hand, as the Court said Kalifair Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 at [28]:

"A successful party is prima facie entitled to the fruits of his judgment. He is entitled to be protected, as far as practicable, from the risk that if the appeal fails assets which earlier were available to satisfy the judgment will no longer be available for that purpose. The Court will endeavour to see that a stay does not cause that kind of prejudice to a judgment creditor."

1. In Vaughan v Dawson [2008] NSWCA 169 at [17] Campbell JA applied what had been said in Kalifair at [18] to the effect that the principles resembled those governing the grant of an interlocutory injunction, namely, whether it had been shown that there was a serious question to be tried and, if there is, where the balance of convenience lies. These principles have regularly been applied, including in Boutros v Nationwide Capital Pty Ltd [2013] NSWCA 246 at [27]-[31].

1. Thirdly, as I indicated during the hearing, my preliminary view is that there should be a stay of the money orders pending the determination of Mr and Mrs Menzies' appeal. All the evidence before me suggests that Mr and Mrs Menzies do not presently have liquid assets available to meet the judgment debt, and their communications with the Law Society evidence a lack of means (see in particular the bank statement entries on 5 and 19 July 2013, and the "Financial Details" section in the Application for Pro Bono Referral within Exhibit D). Further, although strictly there is no evidence of it, Harrison AsJ's reasons ([2013] NSWSC 772 at [125]) record that in 2010 Paccar Financial sought to be substituted as a petitioning creditor pursuant to s 49 of the Bankruptcy Act 1966 (Cth) and applied for sequestration orders against the estates of Mr and Mrs Menzies. Those orders were made: BP Australia Pty Ltd v Menzies [2010] FMCA 375. Mr and Mrs Menzies appealed, and Bromberg J set aside those orders: Menzies v Paccar Financial Pty Ltd [2011] FCA 460.

1. Accordingly, I am of the view that taking steps by way of execution of the money orders would not materially advantage Paccar, and would cause undue prejudice to Mr and Mrs Menzies. That falls within the scope of the considerations applied by this Court in Kalifair at [25]:

"Where the appellants have no assets the judgment creditor, as it has conceded, will not suffer any relevant prejudice if a stay is granted. The loss of its right to proceed to winding-up to prevent the appeals being heard on their merits does not constitute relevant prejudice for present purposes."

1. In expressing that view, I am conscious that Paccar has not as yet been heard in opposition to a stay of the money orders pending the determination of the appeal. That will be reflected in the provisional nature of the orders I will make.

1. Fourthly, in relation to the possession orders, the underlying question is what is an appropriate provisional position to place the parties in pending the determination of the appeal. The position today is that Paccar has final orders in its favour following a final hearing which entitle it immediately to possession of the prime movers and trailers. Mr and Mrs Menzies have exercised their right of appeal challenging those orders, which if successful will entitle them to possession of the prime movers and trailers. The burden lies on Mr and Mrs Menzies to provide a basis for the operation of a stay, pursuant to Uniform Civil Procedure Rules (UCPR) r 51.44. Contrary to statements repeatedly made by Mr Menzies, the mere filing of a Notice of Appeal does not of itself provide a basis for a stay; he and Mrs Menzies need to do something more than engaging their right to appeal in order to deprive Paccar of the fruits of its victory at trial.

1. The applicable principles are analogous to those governing the grant of interlocutory injunctions: Kalifair at [18]; Vaughan at [17]; Boutros at [31]. As best I can see, there are three matters pointing to there being a serious question to be determined on appeal.

1. The first is whether Mr and Mrs Menzies were, as they claim, denied procedural fairness or otherwise can demonstrate appellable error on the part of Harrison AsJ. I am in no position myself to form a view of the strength or otherwise of that claim, however I note that Rothman J formed the view, as noted above, that there was a "sufficiently arguable case" on that basis.

1. Secondly, there is the question of jurisdiction, also referred to by Rothman J, which, if it is to be agitated on appeal, would require an amendment of the Notice of Appeal. Because the question goes to jurisdiction, it seems unlikely that the fact that it was not raised before Harrison AsJ would be an insuperable obstacle to its being argued on appeal.

1. Thirdly, there is Mr Kidd's point concerning the operation of s 568D. It is not necessary for me to determine whether that point is correct, and I do not do so. For one thing, the precise terms of the disclaimer are not before me, and the nuances of Mr Kidd's argument involves and may turn on two matters of detail: the proposition that the disclaimer was of the chattels, not the contract, and that the charge was over the interest in the chattels, not the chattels themselves. For another, there is force in the submission that had the point been taken at first instance, Paccar could have made application under s 568F(1)(b) as a person "to whom it seems to the Court appropriate that the property be vested or delivered". For a third, and without conveying any criticism to those appearing on extremely short notice and in one case pro bono, I have formed the initial view that there are factual and legal aspects of the point which have not been fully ventilated. Not only do I not know the precise terms of the disclaimer or whether it was a disclaimer of the chattels or the contracts, but also I do not know whether the notification under s 568A was given, or whether leave of the Court was given, or what Paccar's attitude to the disclaimer was. The expansion of the scope for exercise of the power to disclaim conferred by s 568 in recent years (for there could have been no disclaimer of the chattels, as opposed to the contracts, pursuant to s 568 in the form it took in Sandtara Pty Ltd v Abigroup (1996) 42 NSWLR 491) may give rise to further questions as to the applicability of earlier authorities. And this is an area where there is considerable legal complexity. As Rares J said in National Australia Bank Ltd v New South Wales [2009] FCA 1066; (2009) 182 FCR 52 at [28]:

"... as all judges since Jessel MR have recognised the question of where the title goes after a disclaimer is as clear as mud."

1. Further, I note that the decision of the Victorian Court of Appeal on which Mr Kidd relied was the subject of a grant of special leave: [2013] HCA Trans 106, during which it was said that "this is the only occasion on which this view of the disclaimer power has been taken" and Kiefel J observed that "this is a fairly novel approach". Although I confess that I am inclined to doubt the ultimate success of Mr Kidd's submission, I would acknowledge (a) that there is a body of law dealing with the making of vesting orders in favour of a secured creditor following a disclaimer (see the decisions to which Bennett J referred in National Australia Bank Ltd v State of Victoria at [9]-[12], and a passage in the reasons of Bowen CJ in Eq in Re Middle Harbour Investments Ltd [1977] 2 NSWLR 652 at 658 which presupposes that a disclaimer can operate to interfere with the security of a mortgagee) to which Harrison AsJ did not refer (and may well not have been referred to), and (b) that the area is not free from complexity.

1. But because I have reached the view that the provisional orders I propose to make can be made without taking these issues any further, it is inappropriate that I do so. In particular, nothing in these reasons should be taken to predetermine the outcome of any application to amend the Notice of Appeal to raise the points flagged by Rothman J and Mr Kidd.

1. This application insofar as it relates to the possession orders may, in my opinion, be resolved on the preliminary basis, favourable to Mr and Mrs Menzies, that there is a serious question to be tried. That is because I have reached the preliminary view that the balance of convenience very substantially favours not granting the stay, by reason of the strength of the undertaking proffered by Paccar.

1. Paccar's undertaking requires it, upon sanction of contempt, to store and keep the prime movers and trailers pending the determination of the appeal. That is (considerably) less than Paccar enjoying the fruits of the judgment it has obtained; to the contrary, it imposes positive obligations upon Paccar to preserve and protect the chattels. In the event that Mr and Mrs Menzies succeed on appeal, they will be returned to them. It seems that in the course of the dispute between the parties, both have either threatened, or commenced, prosecutions for contempt against the other, and so Mr and Mrs Menzies would well appreciate the measure of protection afforded to them by Paccar's undertaking to the Court.

1. Ultimately, the question on the underlying application for a stay of the possession orders is whether it is appropriate, pending the determination of the appeal, for the prime movers and trailers to be in the possession of Mr and Mrs Menzies, or of Paccar. The onus lies upon Mr and Mrs Menzies to show why what is now offered by Paccar is not a fair or appropriate "holding pattern". On the material presently available to me, I think it is unlikely that they would be able to do so.

1. As noted above in connection with my preliminary views on the stay of the money orders, I am conscious that the application before me was, as it turned out, merely an adjournment application. Mr and Mrs Menzies have not as yet been heard fully on the stay of the possession orders. That said, Mr Menzies is, to my mind, articulate and effective in conveying his submissions orally, some of which (without intending any criticism of him) extended beyond the adjournment application to the stay application which underlies it. Further, on 25 August Mr and Mrs Menzies supplied 37 pages of submissions which were principally directed to their application for a stay, and which dealt expressly with the strength of their case and the balance of convenience.

1. Those submissions state (p25) that:

"The Menzies currently have the trucks in secure storage and they will remain there until a Fair and Just Trial takes place and after all Appeals processes are exhausted."

That accords with what I understood was common ground at the Bar table on 15 July 2013.

1. Mr Menzies has said (repeatedly) and written (for example, written submissions p36, and yesterday's submission p3) that it is nonsensical for there to be a stay of the money orders but not of the possession orders: "It is beyond us why all Harrison AsJ's orders are not stayed as we have a right of appeal." If there is one thing which Mr and Mrs Menzies fail to understand about the nature of the process, the different treatment of the money orders and the stay orders is that thing. The point of the following paragraph is to attempt to explain to Mr and Mrs Menzies why in my view (which was evidently shared by Rothman J) that this is a clear case for treating the orders differently.

1. As things stood following the trial, Paccar was entitled to possession of the prime movers and trailers, and to enforce the judgment debt. Filing an appeal does not of itself detract from Paccar's existing rights; UCPR r 51.44(2) makes that plain beyond argument. The central question is what is fair and appropriate for the limited time (ideally, a matter of months) during which the legal rights of Paccar established by the final orders following the trial are qualified by the possibility that an appeal might be allowed. There is no reason whatsoever why an appropriate and fair temporary position might not treat different aspects of a challenged judgment differently - either because there are greater or lesser prospects of challenging parts of the orders, or because some aspects of the challenged judgment, if not stayed, will operate to greater or lesser prejudice to the appellants. It is to my mind plain on the face of Rothman J's reasons that his Honour formed the same view.

1. In the present case, the question on the possession orders resolves to this. Are the prime movers and trailers to be in the possession of Mr and Mrs Menzies, pending the determination of the appeal, or are they to be in the possession of Paccar, subject to its being bound by its undertaking? I am doubtful that Mr and Mrs Menzies will be able to point to arguments to displace the prima facie position that the balance of convenience favours Paccar obtaining possession of the prime movers and trailers to which it is presently entitled by orders which will remain in place unless and until Mr and Mrs Menzies succeed on appeal, especially given that Paccar will subject itself to the terms of the undertaking which it proffers. That said, I acknowledge that Mr and Mrs Menzies have not had the opportunity at all to make submissions in respect of the precise terms of Paccar's undertaking (which was only provided on 28 August 2013), and there may be other matters they wish to raise to detract from the preliminary view I have expressed above.

Summary

1. I have reached the conclusion that in the unusual circumstances of this proceeding, Mr and Mrs Menzies ought to be afforded yet another chance to obtain legal representation. Further, I have formed the view that ss 59 and 60 warrant my expressing the preliminary views set out above, even though I have not yet heard fully from either party. I acknowledge that both Mr and Mrs Menzies are entitled, if they wish, to be heard further in respect of the preliminary views I have expressed.

1. Accordingly, what I have outlined above, which is merely my preliminary view, will need to be qualified in order to provide the parties with an opportunity, should they choose to exercise it, to advance a case that different conclusions should obtain. However, I am most conscious of the very considerable efforts that to date have been devoted to Mr and Mrs Menzies' motion. Mr Menzies has said (and I accept for present purposes) that in the meantime he has not been able to take steps to progress the preparation of documents for his and Mrs Menzies' appeal. Mr and Mrs Menzies, and Paccar, and Paccar's lawyers, and I, are all under obligations to further the overriding purpose to "facilitate the just, quick and cheap resolution of the real issues in proceedings" pursuant to ss 56-60 of the Civil Procedure Act. It seems to me that that purpose is facilitated by my expressing the reasons that I have so that each of Paccar, Mr and Mrs Menzies, and their legal advisors (if any), may determine whether or not they wish to contend for a different interlocutory outcome. In particular, I am hopeful that to the extent that Mr and Mrs Menzies may obtain legal representation, those lawyers will be able to review these reasons and advise Mr and Mrs Menzies as to whether there is utility in exercising the facility contained in the orders I am about to make to be heard further in relation to the terms of the interlocutory stay. They may alternatively decide that their energies are better directed to prosecuting the appeal.

1. In light of the substantial evidence of activity by Mr and Mrs Menzies directed to obtaining legal representation, which I infer has led to the assistance to the Court by Mr Kidd, I am minded to allow a further four weeks, counting from 26 August, within which they may seek to obtain legal representation. I have no reason to doubt that Mr and Mrs Menzies have continued in the course of this week to secure legal assistance, and I note that in the submission supplied yesterday, they assert precisely that thing. Accordingly, I will extend the stays of both the possession orders and the money orders until 5 pm Monday 23 September 2013. That is more than three months after those orders were made.

1. Mr and Mrs Menzies asked for six weeks, or alternatively such time as the Court considered appropriate. I think six weeks is too long, having regard to the history of this matter. Either Mr and Mrs Menzies will obtain the benefit of legal assistance or they will not. If they do not, then they do not need six weeks. If they do obtain legal assistance, the immediate question is whether there is a sound basis for exercising the facility in the orders I will make in support of a different interlocutory regime pending the determination of the appeal. For practical purposes, from their perspective, that amounts to determining what if anything may be said in support of a different approach in respect of the possession orders. The lawyer retained will have the benefit of these reasons. The question is simple: is there a sound basis for contending for some different interlocutory regime other than possession of the prime movers and trailers by Paccar subject to the undertaking it has proffered. There may be a number of things to be said against that regime, but I do not see that it is something that would take a lawyer long to answer. In particular, it is a question whose answer does not require reviewing the whole of the enormous amount of historical material which has been accumulated in this dispute.

1. I have read Mr and Mrs Menzies' submission sent yesterday that they are hopeful of retaining a barrister (who is not named), who is said to be away from early September under 20 September (p2). I am not prepared to provide any additional time on the strength of that statement. I put to one side that it is not evidence, and was filed yesterday not pursuant to any leave. Taking the submission at its highest, it is not said that the barrister has been retained, or that if he or she is retained, that he would be unable to provide initial advice in the timeframe. In any event, as I have said, the initial question is discrete, well within the capacity of a large number of barristers and solicitors.

1. Within the next three weeks, but on three business days' notice, either party may make application to vary the regime which I have suggested, on a preliminary basis and without having fully heard from the parties, should apply until the determination of the appeal. That regime is in essence a stay of the money orders until the appeal is determined, on terms that Mr and Mrs Menzies prosecute it with reasonable diligence, but that possession of the prime movers and trailers be given to Paccar, upon the undertaking to the Court which it has proposed. If neither party applies, the orders will continue in force until the determination of the appeal.

1. Accordingly, I will make these orders:

(1)   Extend the existing stays of the money orders and the possession orders (being orders 1, 2, 3 and 5 made on 13 June 2013) until 5pm on Monday 23 September 2013.

(2)   Subject to (4) below, the money orders (being orders 3 and 5 made on 13 June 2013), be stayed until 28 days after the determination of the appeal, on terms that Mr and Mrs Menzies are to prosecute the appeal with reasonable diligence.

(3)   Subject to (4) below, upon the undertaking by Paccar to the Court that, upon delivery to it of the equipment referred to in order 1 made on 13 June 2013, it will store and keep the equipment exercising care as would be required of a bailee of similar goods and that it will deliver the goods in accordance with the order of the Court, orders 1 and 2 made on 13 June 2013 are effective and may be enforced on and after 24 September 2013.

(4)   The parties may apply, on three business days' notice, to be heard further in relation to orders 2 and 3 above.

(5)   The costs to date of the Notice of Motion filed 29 June 2013 and the Amended Notice of Motion filed 21 August 2013 should be costs of the appeal.

1. To be repetitive but hopefully clear, those orders envisage that Paccar may wish to contend for a variation of the stay of the money orders or (perhaps) the form of the undertaking, which differs (but only slightly) from that provided on 28 August 2013. They also envisage that Mr and Mrs Menzies may wish to contend for a further stay of the possession orders, or a variation of what I have provisionally ordered will occur after 23 September. To the extent that either party wishes to be heard further orally (as opposed to filing and serving written submissions), that party should supply in the first instance short submissions as to why so to do is consistent with the underlying purpose and with ss 56-60 of the Civil Procedure Act. So that there may be no doubt about it, although the orders made above are provisional, I do not accept that either party has an unqualified right to a further oral hearing. If the parties do wish to be heard further as to the stay, they should do so promptly.

1. I note that the appeal is listed for directions before the Registrar on 4 September. On that occasion, the box of affidavits which was delivered to my chambers will be returned to Mr and Mrs Menzies.

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Decision last updated: 30 August 2013