Pialba Commercial Gardens Pty Ltd v Braxco Pty Ltd

[2010] QCA 299

[2010] QCA 299

COURT OF APPEAL

MUIR JA

Appeal No 9936 of 2010
SC No 3609 of 2006

PIALBA COMMERCIAL GARDENS PTY LTD             Applicant
(ACN 065 452 146)

and

BRAXCO PTY LTD (ACN 100 521 711)  First Respondent/ Plaintiff

and

CORSER SHELDON AND GORDON SOLICITORS     Second Respondent/ Unknown

And

CAROLYN CORNFORD (ALSO KNOWN AS

CAROLYN ANN McELLIGOTT AND NOW                   Third Respondent/ Defendant

KNOWN AS CAROLYN ANN FRENCH)

BRISBANE

DATE 26/10/2010

ORDER

MUIR JA:  The applicant/appellant applies for a stay of enforcement of the judgment given against it in favour of the first, second and third respondents in the proceedings until determination of the appeal or earlier order.

The first respondent to the appeal and to this application is admittedly insolvent.  It is obvious that if a stay is not granted the appellant is not merely at risk that it will be unable to recover the judgment monies, it is plain that the monies won't be recoverable.

The second respondent's solicitors do not oppose the orders sought.  The first and third respondents accept the granting of a stay is appropriate, but are concerned that in the event that the appeal is unsuccessful they are protected for their costs.

It is only the costs that are a matter of concern because the judgment sum has been paid into the appellant's solicitor's trust account subject to an undertaking by the solicitors about which there is no dispute.

There is material before me which swears to the financial position of the appellant.  I do not propose to go into it in detail.  A director of the appellant swears that it has land and buildings (in fact the property in question in litigation) worth approximately $20 million which property is encumbered to the extent of $1.5 million.

Balance sheets and profit and loss accounts are exhibited which show that the company has traded at a profit in the 2008 and 2009 years, and has substantial assets.  One might say assets far less than the $20 million referred to by the director in his affidavit.

The first and third respondents were not satisfied with this evidence of appellant's financial status.  They queried the lack of proof or verification of the valuation offered by the director, and noted with justification that no attempt had been made to depose that there was no material adverse change in the financial position of the appellant after 30 June 2009.

Those problems have now been remedied, perhaps not with perfection, but nevertheless to my mind in a sufficiently satisfactory way.  The point is made by Mr Davis SC, and it would seem to me to be a good one, that one can do a rudimentary valuation of the subject property by looking at its income stream which is sworn to.

...

MUIR JA:  The evidence is that the subject property consistently generated rental income between $2.4 and $2.5 million in the 2006-2009 years inclusive.  Unless the outgoings are extraordinarily high, the property is surely very substantial in value.  I note also the evidence that the appellant has consistently maintained an operating profit after income tax of between $1,120,000 and $1,150,000.

In those circumstances it appears to me that the further material made available today is more than sufficient to allay any of the respondent's legitimate fears.

...

MUIR JA:  I order in terms of paragraphs 1 and 2 of the application filed 6 October 2010.