Pico Holdings Inc v Wave Vistas P/L (formerly Turf Club Australia P/L)

[2003] QCA 489

SUPREME COURT OF QUEENSLAND

CITATION:	Pico Holdings Inc v Turf Club Aust P/L & Anor [2003] QCA 489
PARTIES:	PICO HOLDINGS INC (applicant/applicant) v WAVE VISTAS PTY LTD formerly TURF CLUB AUSTRALIA PTY LTD ACN 088 729 819 (first respondent/respondent) NATIONAL AUSTRALIA BANK LIMITED ACN 004 044 937 (second respondent)
FILE NO/S:	Appeal No 3589 of 2002 SC No 8996 of 2001
DIVISION:	Court of Appeal
PROCEEDING:	Application for Stay of Execution
ORIGINATING  COURT:	Supreme Court at Brisbane
DELIVERED EX	6 November 2003
TEMPORE ON:
DELIVERED AT:	Brisbane
HEARING DATE:	6 November 2003
JUDGE:	Davies JA
ORDER:	Application for stay of execution dismissed with costs
CATCHWORDS:	APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - QUEENSLAND - STAY OF PROCEEDINGS - GENERAL PRINCIPLES AS TO GRANT OR REFUSAL - where applicant unsuccessful both at trial and on appeal - where costs ordered against applicant at both instances - where applicant applied for special leave to appeal to the High Court - where applicant's prospects of success in special leave application poor - where if successful before High Court applicant will recover substantial portion of money owed to it - where applicant seeks a stay of costs orders pending special leave application - whether stay ought to be granted
COUNSEL:	M R Bland for the applicant G D Sheahan for the respondent
SOLICITORS:	McCullough Robertson as town agents for Gilbert & Tobin Mallesons Stephen Jaques for the respondent (Sydney) for the applicant

DAVIES JA: The applicant, Pico Holdings Inc seeks an order The costs statements, which appeared to be the subject of the application, are in respect of orders for costs made in the Trial Division on 21 November 2001 and 26 March 2002 and by this Court on 23 May 2003. The first of those orders was made in an application by the applicant for leave to lodge a further caveat over real property owned by the respondent. That order was not the subject of an appeal to this Court and is not subject of the pending special leave application to the High Court to which I will refer later. Mr Bland, however, has informed me this morning that his application this morning was not intended to include that costs order or the assessment in respect of it.

that the assessment of costs statements of the respondent,
Turf Club Australia Pty Ltd dated 21 July 2003 be stayed.

The second costs order of 26 March 2002 was made on the dismissal and application for declarations, principally that the applicant held an equitable charge over certain property to which I will refer a little later and that its equitable charge had priority over any charge or other equitable interest in favour of the second respondent in the proceedings, the National Australia Bank Ltd.

The third costs order was imposed on the dismissal of the outlines to this Court that the stay is sought pending the outcome of the special leave application to which I have referred, which is an application for leave to appeal against the judgment of this Court to which I have already referred and any appeal which follows from it.

appeal to this Court from the order of 26 March 2002.

There are a number of procedural requirements with which the applicant has not complied and it is argued by Mr Sheahan on behalf of the respondent that good reason should be given for

dispensing with these requirements before this Court proceeds
to hear this application. However for reasons which I am
about to give I do not think it is necessary to consider that

question further.

The questions decided by the learned primary judge on 26 March then sought to argue that Voss was acting as agent for the first respondent as undisclosed principal in making the agreement. It was not permitted by this Court to argue that because this Court thought that, it not having been pleaded or argued below, it might raise questions of fact on which the first respondent might have called evidence. This Court found also that the applicant had not proved that the first respondent was a party to the agreement which Voss made with the applicant.

2002 and by this Court on 23 May 2003 arose in the following
circumstances. In December 2000 the applicant lent a company,
Dominion Capital, $1.2M US, the principal to be repaid by
5 January 2001. That date was subsequently extended and on
25 April 2001, a man called Voss, the director of Dominion,
sought a further extension of the loan. On being told that
the applicant would require further security for the loan, the
director, who was also the director of the first respondent,
offered the subject property which in fact was owned by the
first respondent as security. That much, it seems, was
unknown to the applicant. The applicant accepted this
property and the offer, it seems, was evidenced by a
confirmatory letter from Dominion. Dominion failed to repay
the loan and the applicant obtained judgment against it for
$1.2M US plus interest. In the meantime the first respondent
had agreed to mortgage the property to the second respondent
and the applicant commenced proceedings seeking declarations
and orders to the effect that it had an enforceable interest
in the subject property. The trial judge dismissed the
application finding that the first respondent was not a party
to the agreement which had been made, as I have said, on 25

The application for special leave seeks to argue, in effect, two grounds. The first is that this Court was wrong in not concluding that the first respondent was a party to the agreement made between Voss and the applicant on 25 April 2001. And the second was that this Court was wrong in concluding that the applicant was precluded from arguing that Voss acted as agent for the first respondent as undisclosed principal in making the agreement on that date. The first of these questions this Court described as a question of fact. The second appears clearly to involve an assessment by this Court of whether the first respondent would be prejudiced by the point being raised for the first time in this Court.

As to the first of those, though, Mr Bland has said in this Court that it is not so much a question of fact but a question of how you would apply the objective test to a reasonable person in the position of Mr Voss in the circumstances of this case. Even if one defines the question in the way Mr Bland does, however, it seems to me to be a narrow application of the objective theory of contract, not a question of the theory itself, that is, the principle itself.

There is also the problem, as Mr Sheahan raised, that this Court not having decided the second question, that is, the priority question, the High Court would be reluctant to embark

upon that rather than sending the matter back to a Court for

determination.

I do not think it is appropriate in an application of this which the stay is sought involves two costs orders and the failure to seek a stay from the judge who made the first of those costs orders is itself, it seems to me, a relevant factor though not a major factor in the exercise of my discretion here. Nevertheless it seems to me that the matter to which I have already referred and the matters to which I am about to refer to are more important factors.

kind to make an extensive analysis of the reasons of this
Court in reaching the conclusions which it does, or to go in
further detail to the correctness of the proposition advanced
by Mr Bland. However looking at the matter globally it seems
to me that the applicant's prospects of success in an
application for special leave to appeal are not at all high
and I would in fact say they are poor. That is, of course, a
relevant factor in considering whether I should grant the stay
sought.

One really must start from the proposition, it seems to me, that a party who is entitled to a judgment is entitled to enforce that judgment. Some exceptional reason, whether one calls it exceptional or uses some other adjective perhaps does not matter, must be shown for displacing that right. A common example is where the applicant if successful in an appeal will be unable to obtain the fruits of its judgment.

If the applicant here is successful in its application for respondent will not be able to pay and Mr Sheahan for the respondent does not urge upon me any substantial argument in favour of its capacity to pay.

special leave and in its appeal to the High Court it will
presumably recover from the National Australia Bank the
proceeds from the sale by the Bank of the subject property
which it seems was $1.9M. It is accepted by the parties that
that would be more than sufficient to cover the principal
owing under the loan but insufficient to cover both principal
and interest. But it will also be able to recover from the
first respondent, to the extent that the first respondent is
able to pay, the balance of its debt including costs.

There may be difficulties, on the other hand, if the applicant fails in its application in recovering costs against the respondent, it being a foreign company. It is unclear to me what its position is so far as assets in this country is concerned.

The other factor which seems to me to be relevant is the point at which this application is being made. It appears that there has been some delay in making this application which has resulted in the first respondent incurring the costs of preparing bills of costs and answering objections to those bills, costs which would not have been incurred if the application for stay had been made at an earlier stage.

But in any event it seems to me that the factors which I have mentioned, taken together globally, require me in the exercise of my discretion in the circumstances to refuse the stay sought.

I would therefore dismiss the application.

...

DAVIES JA: With costs.