National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority (No 2)

[2018] NSWSC 969

Supreme Court

New South Wales

Medium Neutral Citation:

National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority (No 2) [2018] NSWSC 969

Hearing dates:

14 March 2018

Date of orders:

14 March 2018

Decision date:

14 March 2018

Jurisdiction:

Common Law

Before:

Walton J

Decision:

The Court makes the following orders:

 

(1) The notice of motion brought by Ms Charlton, filed 28 February 2018, is dismissed.

 (2) Costs reserved.

Catchwords:

PRACTICE AND PROCEDURE – stay of proceedings – s 67 of the Supreme Court Act 1970 – general power to stay proceedings – intention to appeal interlocutory proceedings before the Court – no summons seeking leave to appeal filed – no draft appeal provided – applicant seeks opportunity to prosecute that appeal – relevant authorities – interests of justice – whether reasonable arguable grounds of appeal – discretion – application dismissed – costs reserved

Legislation Cited:

Civil Procedure Act 2005 (NSW)
Supreme Court Act 1970 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685
Fokas v Mansfield (No 2) [2017] NSWCA 261
Fokas v Mansfield (No 3) [2017] NSWCA 315
Hussain v Haynoum Developments Pty Ltd [2014] NSWCA 173
Macatangay v State of New South Wales (No 2) [2009] NSWCA 272
National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority [2018] NSWSC 157
Page v Mckensey [2004] NSWCA 437
Weatherall v Satellite Receiving Systems (Australia) Pty Ltd (1999) 30 ACSR 698; [1999] FCA 218
Wickstead v Browne (1992) 30 NSWLR 1; [1992] NSWCA 272

Texts Cited:

Ritchie’s Uniform Civil Procedure (NSW)

Category:

Procedural and other rulings

Parties:

2015/27483
National Australia Bank Ltd (Plaintiff / Cross-Defendant)
Josephine Joan Charlton in her own capacity and as trustee for the Phoenix Trust (Defendant / First Cross-Claimant)
Kevin Michael O’Brien (Second Cross-Claimant)

  2016/122304
Josephine Joan Charlton (First Plaintiff)
Kevin Michael O’Brien as trustee of the Phoenix Trust (Second Plaintiff)
The General Manager, NSW Rural Assistance Authority (First Defendant)
National Australia Bank Ltd (Second Defendant)

Representation:

Counsel:
2015/27483
C Colquhoun (Plaintiff / Cross-Defendant)

 

2016/122304
C Colquhoun (Second Defendant)

 

Solicitors:
2015/27483
DibbsBarker Lawyers (Plaintiff / Cross-Defendant)

  2016/122304
DibbsBarker Lawyers (Second Defendant)

File Number(s):

2015/27843; 2016/122304

EX TEMPORE JUDGMENT

1. HIS HONOUR: This judgment concerns an application by Ms Charlton by notice of motion filed on 28 February 2018 seeking a stay of proceedings in case number 2015/27843 pursuant to s 67 of the Civil Procedure Act 2005 (NSW), and a vacation of the hearing dates in the matter (“the notice of motion”). No stay application is brought in relation to the related proceedings for a cross application and judicial review.

2. That application sought to stay proceedings which were listed for trial today (over 3 days) upon the basis that Ms Charlton intended to bring an appeal from a decision of the Court, as presently constituted, refusing an application for summary dismissal: see National Australia Bank Ltd v Charlton; Charlton v The General Manager, NSW Rural Assistance Authority [2018] NSWSC 157 (“Charlton No 1”).

3. The notice of motion was initially before Lonergan J as duty judge who ordered that the notice of motion be stood over for hearing before the trial judge on 14 March 2018: see National Australia Bank Ltd v Charlton [2018] NSWSC 311 (“Charlton No 2”).

4. No summons seeking leave to appeal has yet been filed although the time limit for filing of the same expires in 7 days. In the course of the hearing of the matter today, Ms Charlton indicated she had prepared a draft of the appeal. Despite an intimation that the draft may be produced in support of her application, she elected not to put that document before the Court. Nonetheless, arguments were advanced by Ms Charlton as to the central issues that she intended to advance on appeal.

BACKGROUND

5. There are a number of relevant matters which by way of background can be drawn from the decision in Charlton No 1:

1. NAB commenced the debt and possession proceedings against Ms Charlton by way of a statement of claim filed 29 January 2015. By a statement of cross-claim brought on 9 July 2015 (and later amended on 2 August 2015) Ms Charlton, then as the first cross-claimant, and Kevin Michael O’Brien, as a second cross-claimant, brought a cross-claim in the debt and possession proceedings (see Charlton No 1 at [2]).

2. There were lengthy case management processes which are described in Charlton No 1 from [21]-[50]. Some particular aspects of the course of those proceedings follow.

3. On 2 June 2016, both the debt and possession and judicial review proceedings were listed for mention before Schmidt J. The following order was, inter alia, made: “The two sets of proceedings are to be heard together where evidence in one matter be evidence in the other.” (see Charlton No 1 at [21(9)]).

4. On 21 July 2017, the Court ordered that the parties be referred to mediation. In response to the orders of the Court, on 31 July 2017, Ms Charlton emailed Chambers of the Court to advise of an intention to appeal those orders. (see Charlton No 1 at [38]-[40]).

5. The matter was listed for directions on 24 August 2017 where NAB indicated that it consented to the vacation of the mediation order given the substantial delay that may be occasioned by any appeal. The application was subsequently withdrawn. The following orders, inter alia, were made:    

1. The matter be provisionally listed for hearing on 12, 13 and 14 February 2018 on an estimate of 2 to 3 days, subject to filing a notice of motion to have proceedings no 2015/27843 and proceedings no 2016/122304 heard separately.

2. Any notice of motion, and affidavit in support, seeking to have proceedings no. 2015/27843 and proceedings no. 2016/122304 heard separately must be filed and served by 7 September 2017: (see Charlton No 1 at [41] and [45]).

6. On 6 September 2017, Ms Charlton emailed the notice of motion seeking summary judgment and the separation of the proceedings dated 5 September 2017 to the Court. The first prayer for relief extended beyond the scope of the leave afforded under order 4 (regarding the filing of a notice of motion) in that Ms Charlton sought summary judgment of the debt and possession proceedings: (see Charlton No 1 at [46]).

7. On 7 September 2017, NAB sought that the matter be listed for directions in respect of the notice of motion. The proceedings were listed for directions on 29 September 2017. Directions were made for the hearing of the notice of motion on that occasion but the Court emphasised that it had not vacated the hearing dates fixed: (see Charlton No 1 at [47]).

8. The motion was listed for hearing on 24 November 2017. (see Charlton No 1 at [48]).

9. The matter was listed for a pre-trial directions hearing on 4 December 2017 at which time the present hearing dates were fixed (see Charlton No 1 at [45]).

RELEVANT STATUTORY PROVISIONS AND PRINCIPLES

6. Whilst the appeal is not before the Court, even in a draft form, the submissions of NAB to the effect that the appeal which, Ms Charlton contemplates requires, by its nature, the grant of leave may be accepted. Section 101(2)(e) of the Supreme Court Act 1970 (NSW) provides as follows:

101 Appeal in proceedings before the Court

(2) An appeal shall not lie to the Court of Appeal, except by leave of the Court of Appeal, from:

…

(e) an interlocutory judgment or order in proceedings in the Court.

7. An order refusing summary dismissal, under r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW), is an interlocutory decision for the purposes of that section: Wickstead v Browne (1992) 30 NSWLR 1; [1992] NSWCA 272 at 1; Weatherall v Satellite Receiving Systems (Australia) Pty Ltd (1999) 30 ACSR 698; [1999] FCA 218; Page v Mckensey [2004] NSWCA 437 at [30]; Macatangay v State of New South Wales (No 2) [2009] NSWCA 272; at [11]; Fokas v Mansfield (No 2) [2017] NSWCA 261 per White JA at [13]–[14]; Fokas v Mansfield (No 3) [2017] NSWCA 315 at [24]–[26].

8. This stay is brought pursuant to s 67 of the Supreme Court Act, which provides:

67 Stay of proceedings

Subject to rules of court, the court may at any time and from time to time, by order, stay any proceedings before it, either permanently or until a specified day.

9. The learned authors in Ritchie’s Uniform Civil Procedure NSW note the following in regard to that section:

Section 67 confers a general power to stay proceedings, without identifying any particular criteria for its exercise. The scope of the power, and the appropriateness of its exercise, may be informed by a wide range of considerations.

10. NAB placed reliance upon on Hussain v Haynoum Developments Pty Ltd [2014] NSWCA 173 (“Hussain”), which was a case where the applicants moved on two notices of motion, the first of which sought an order that District Court proceedings be stayed, pending the determination of an appeal, and that the applicants file a summons for leave to appeal by a date specified by the Court.

11. In Hussain, McColl J found the following (at [50]-[55] and [57]):

[50] There is an anterior practical constraint on this Court entertaining appeals from decisions of the nature of that which the applicants seek to challenge, that is to say, an interlocutory decision on a matter of practice and procedure. In In re the Will of F B Gilbert (dec) (1946) 46 SR (NSW) 318 (at 323) Jordan CJ stated that a "tight rein" had to be kept on interference in an exercise of discretion on a point of practice or procedure or otherwise the "disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant ... could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal." In Partnership Pacific Ltd v Killen (Court of Appeal (NSW), 10 April 1979, unrep) the Court of Appeal (Moffitt P, Reynolds and Hutley JJA) disapproved of attempts to litigate on appeal first instance intermediate decisions having the effect that "the proceedings at first instance [are] delayed while these distracting diversions are indulged in."

[51] In Nikolaidis v Legal Services Commissioner [2005] NSWCA 91 (at [18]), Bryson JA observed that:

"Judicial decisions relating to the enforcement of judgments which are under appeal cannot be readily applied to an interlocutory stay of proceedings, but in principle the inherent power of the court extends to appeals in interlocutory proceedings. The power exists because it is necessary for the administration of justice, and it is to be exercised where it is necessary to exercise it. The power to order a stay is discretionary and such an intervention should not take place lightly. The outcome which is likely if there is no stay must be so adverse and severe that the attainment of justice requires interlocutory intervention. It must be shown that it is likely that there will be some adverse consequence of allowing the proceedings under challenge to continue and that the outcome will be so difficult to remedy, or otherwise so adversely severe in its impact, that intervention by the Court of Appeal should take place notwithstanding that there has not been an opportunity for full consideration." (Emphasis added)

See also Rockdale Beef Pty Ltd v Industrial Relations Commission [2005] NSWCA 369 per Hodgson JA (at [12]).

[52] In Nikolaidis, Bryson JA declined an application for a stay sought in relation to proceedings in the Administrative Decisions Tribunal although he accepted (at [15]) that the applicant had a reasonably arguable case for a grant of leave to appeal despite the Court of Appeal's "strong general disposition against interventions at interlocutory stages" because (at [20]) it was "quite important in the ordinary course the ordinary functioning of ADT should be allowed to proceed".

[53] More recently, Macfarlan JA (Ward JA and Tobias AJA agreeing) observed in Cornelius v Global Medical Solutions Australia Pty Ltd [2014] NSWCA 65; (2014) 98 ACSR 301(at [21]):

" ...For good reason, leave to appeal against interlocutory decisions is required (Supreme Court Act 1970, s 101(2)(e)). Appellate courts are reluctant to intervene in relation to decisions made prior to the termination of proceedings at first instance. It is not usually conducive to the 'just, quick and cheap resolution of the real issues' in proceedings for that to occur (Civil Procedure Act 2005, s 56(1); In re the Will of F B Gilbert (1946) 46 SR (NSW) 318 at 323; Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; 148 CLR 170 at 177). As a result, an applicant for leave to appeal in such a matter will normally be required to establish at least a clear case of material error in the decision at first instance in order to obtain leave to appeal." (Emphasis added)

[54] Leeming JA considered the difficulties faced by a party seeking to challenge an interlocutory decision of practice and procedure, and obtain a stay in support of that challenge, in Thomson v Young [2013] NSWCA 300 (at [6] ff). In that case an application was made for a stay of proceedings in the District Court pending the determination of the summons for leave to appeal seeking to challenge a trial judge's rejection of an application to amend a defence. His Honour observed that "a special case - must be made out" to warrant this court's interference, referring to Symonds v Egan National Valuers (NSW) Pty Ltd (Court of Appeal (NSW), 26 February 1996, unrep) per Mahoney P (Priestley and Handley JJA agreeing).

[55] Leeming JA opined (at [13]) that the effect of these authorities was to demonstrate the "high threshold required to be satisfied on an application" for a stay of proceedings pending an application to challenge a decision on a matter of practice and procedure. He concluded (at [13]) that he should not grant a stay because, in substance, the applicant had not persuaded him the case was one warranting "the exercise of an exceptional jurisdiction by this Court".

…

[57] In my view the applicants have not demonstrated a clear case of material error (Cornelius) or an outcome so adverse that justice necessitates interlocutory intervention: Nikolaidis; Rockdale.

12. In Welker & Ors v Rinehart & Anor (No 2) [2011] NSWSC 1238 (“Welker”), Brereton J found the following:

[57] On an application of this type, the Court of Appeal encourages trial judges to determine stay applications - including applications which, though not strictly stay applications, are in the nature of stay applications, such as for an interim injunction pending the determination of an appeal, following the refusal of an injunction. Whether the trial judge grants a short stay only until the matter can be brought to the Court of Appeal for consideration by a judge of appeal, or a stay pending the determination of the appellate proceedings but subject to such order as the appellate Court may make, usually depends on the view of the Court at first instance as to the prospects of the appeal. Even where the primary judge Court very much doubts that there is an arguable case of error, a prospective appellant will often be afforded a short stay to enable the matter to be agitated in the Court of Appeal, at least if refusal of a stay in the meantime might render an appeal nugatory. But when the primary judge thinks that it is reasonably clear that there is an arguable appeal, the primary judge should endeavour so far as practicable to relieve the Court of Appeal of having to determine the matter. That does not preclude the ability of the Court of Appeal to do so, nor does it preclude the parties from returning to the primary judge for a variation of the order.

13. In addition to the relevant considerations regarding prospects of success in Hussain at [53] and [57] and Welker at [57], reference should be made to the judgment of the Court of Appeal per Kirby P, Hope and McHugh JJA in Alexander v Cambridge Credit Corporation Ltd (Receiver Appointed) (1985) 2 NSWLR 685 (“Cambridge Credit”). The following remarks by the Court should introduce that reference (at 694):

… In our opinion it is not necessary for the grant of a stay that special or exceptional circumstances should be made out. It is sufficient that the applicant for the stay demonstrates a reason or an appropriate case to warrant the exercise of discretion in his favour.

… The onus is upon the applicant to demonstrate a proper basis for a stay that will be fair to all parties: Trlin. …The Court has a discretion whether or not to grant the stay and, if so, as to the terms that would be fair. In the exercise of its discretion, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties before it: Attorney-General v Emerson (1889) 24 QBD 56.

14. The key and often cited passage of the judgment as to prospects of success is as follows (at 695):

Two further principles can be mentioned. The first is that where there is a risk that the appeal will prove abortive if the appellant succeeds and a stay is not granted, courts will normally exercise their discretion in favour of granting a stay: Scarborough v Lew's Junction Stores Pty Ltd; applied in Sun Alliance Insurance Ltd v Steiger (Full Court, Supreme Court of Victoria, 22 March, 1985, unreported). Thus, where it is apparent that unless a stay is granted an appeal will be rendered nugatory, this will be a substantial factor in favour of the grant of a stay: Wilson v Church (No 2) (1879) 12 Ch D 454; Re Middle Harbour Investments Ltd (In Liq). Secondly, although courts approaching applications for a stay will not generally speculate about the appellant's prospects of success, given that argument concerning the substance of the appeal is typically and necessarily attenuated, this does not prevent them considering the specific terms of a stay that will be appropriate fairly to adjust the interest of the parties, from making some preliminary assessment about whether the appellant has an arguable case.

15. The learned authors of Ritchie’s Uniform Civil Procedure made the following observations (at [51.44.15]):

An appellant applicant does not have to show that the circumstances relied on to support a judgment stay can properly be described as “special” or “exceptional”: Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685; 10 ACLR 42; Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65; 137 ALR 498; 35 IPR 193. An appellant’s ability to identify reasonably arguable grounds of appeal is highly relevant to the exercise of the stay discretion: Andrews v John Fairfax & Sons Ltd [1979] 2 NSWLR 184; Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 at 695; 10 ACLR 42. The existence of arguable grounds of appeal is not necessarily sufficient to justify the grant of a stay: McBride v Sandland (No 2) (1918) 25 CLR 369, at 374; 25 ALR 54. But their absence is likely to be a determinative consideration against the stay application: Chen v Lym International Pty Ltd [2009] NSWCA 121 at [15] per Beazley JA; Trad v Harbour Radio Pty Ltd [2010] NSWCA 41 at [48] per Tobias JA; Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 at 695; 10 ACLR 42.

CONSIDERATION

16. The central tenant of Ms Charlton’s contention, in support of the stay application, was that the stay should be granted to permit her to bring an appeal from the judgment in Charlton No 1. Further, as the time for the bringing of such an appeal had not expired, as a matter of fairness, the hearing of the matter should not go forward, it was contended, until she was permitted to exercise any right to bring such an appeal. The time for the filing of an appeal had not expired (there being 7 days remaining).

17. Further, it was contended, the Court should permit Ms Charlton to have a full opportunity to prosecute that appeal as there would be ventilated significant points of law, which, it was said, would assist in the disposition of any hearing in the future of a trial of the debt and possession proceedings.

16. It was submitted, on behalf of Ms Charlton, there would be no loss of time or cost by the grant of the stay.

17. NAB resisted the application on two grounds. First, the prospects of the appeal were low. Secondly, it was argued that Ms Charlton would not suffer any prejudice if the application to stay the proceedings and vacate the hearing fixed was dismissed. At least, so far as summary dismissal was concerned, it was contended, she would have an opportunity to have all arguments agitated by her on that application at the final hearing.

18. The Court has a discretion to grant or refuse a stay; the exercise of which will require cognizance of the aforementioned principles but ultimately will be governed by the relevant statutory provision and the need to exercise the power in the interests of justice.

19. That reminder of the necessary obligations falling upon the Court in the resolution of the notice of motion must result in the Court resisting the resolution of the application on one basis encouraged by NAB, namely, that Ms Charlton had failed to expedite proceedings for an appeal and asked the Court, as presently constituted, to vacate the hearing dates in that light. Similarly, I do not consider the matter may be resolved upon the basis that Ms Charlton failed to articulate the grounds of a formal appeal so that the question of arguability may be properly considered.

20. Whilst Ms Charlton, as an unrepresented litigant, may not be properly described as uninformed as to her rights or inept in formulating argument (she filed three written submissions in support of the hearing proper, presented substantial argument in favour of her summary dismissal application and has previously brought an appeal), I do not consider the interests of justice warrant the defeat of her application on such a relatively strict procedural basis. This conclusion must at least follow as the time for filing of the appeal has not past, even though it should be observed that at the time of the completion of argument on the summary dismissal argument and at the point of delivery of the same, Ms Charlton announced she would appeal any adverse judgment, that is before the assessment of reasons for judgment.

21. However, that conclusion does not rob from consideration, the appropriateness of considering whether there may be a material error or at least an arguable case in the exercise of the Court’s discretion on the stay.

22. The Court has had the benefit of argument by Ms Charlton, which in essence rehearsed her central arguments of the appeal. In fact, she identified that she had a draft appeal (albeit not a complete draft) but did not produce the same despite the Court raising with her the prospect of doing so.

23. The prospects for success may be judged in that light and, in that respect, there lies, in my view, a significant hurdle for the proposed appeal.

24. The submissions advanced paid no heed to the need for leave to appeal and for the most part proceeded upon the basis of an agitation of submissions on the substantive issues in the proceedings proper rather than the subject matter of that which could constitute an appeal. No attention was focused upon where error may be demonstrated in a finding in Charlton No 1, for example, that the case for NAB was not untenable or was arguable.

25. Take, for example, the issue which occupied a good deal of the submissions by Ms Charlton today – that is, the issue which was described as “the 2011 enforcement issue” in Charlton No 1. Argument was put at length as to the substance of Ms Charlton’s case and why there were available grounds of appeal. However, whilst this is a serious issue in the trial of this matter, there was no explanation as to why a conclusion in Charlton No 1, that there were real factual and legal issues as to the question, including to those distilled at [97] of that judgment might properly attract leave to appeal. Nor were there (submissions as to why a conclusion that NAB may have an arguable case (see Charlton No 1 at [98]) may also attract leave to appeal (or, for that matter, why NAB’s case was not arguable).

26. Those issues are further complicated by Ms Charlton’s intention to raise in the application for leave to appeal fresh evidence which was not before the Court in the hearing of the summary dismissal application.

27. The Court raised the issue in Welker at [57] as to whether the refusal of the stay might render the appeal nugatory and as to the implications of that matter for the determination of the stay application. Counsel for NAB accepted that a refusal of the stay would significantly undermine the appeal.

28. Whilst a refusal of a stay in this matter may not strictly render the appeal nugatory, it would, in my view, detrimentally effect the prospects of it being prosecuted in a significant way (the Court of Appeal may still, of course, determine the question or questions of law raised by Ms Charlton in relation to the summary dismissal judgment).

29. However, this is not a case where the determination of the summary dismissal application has, in any way, finally determined (or determined at all) the debt and possession proceedings, let alone, the judicial review proceedings or cross-claim.

30. In that respect, I accept that Ms Charlton may be affected in bringing her appeal and the agitation of the points of law she wished to agitate but any such prejudice is minor because it is substantially mitigated by the fact that the entirety of the arguments she wishes to bring (including new arguments) will be heard in the trial without any delay as the trial is at hand.

31. In contrast, the granting of the stay of the proceedings, would further significantly delay the hearing of proceedings which commenced in January 2016 and which are poised for trial.

32. The issue of time and costs raised by Ms Charlton cannot be in her favour. If the stay was granted and a successful appeal brought, the remainder of the proceedings for the cross-claim will remain. If she was unsuccessful, the present hearing dates would be lost and further hearing dates would be required to be found which may be significant distance away in the Court’s calendar.

33. In the result, the application to stay the proceedings is refused. Costs should be reserved.

ORDERS

36. The Court makes the following orders:

1. The notice of motion brought by Ms Charlton, filed 28 February 2018, is dismissed.

2. Costs reserved.

**********

Decision last updated: 27 June 2018