Portfolio Projects (Qld) Pty Ltd v Crownhill (Overseas) Investments Pty Ltd

[2007] QDC 34

DISTRICT COURT OF QUEENSLAND

CITATION:	Portfolio Projects (Qld) Pty Ltd v Crownhill (Overseas) Investments Pty Ltd [2007] QDC 034
PARTIES:	PORTFOLIO PROJECTS (QLD) PTY LTD ACN 100 474 039
Respondent/Plaintiff V
CROWNHILL (OVERSEAS) INVESTMENTS PTY LTD ACN 100 598 409
Applicant/Defendant
FILE NO/S:	BD 2881/2006
DIVISION:	Civil
PROCEEDING:	Application
ORIGINATING  COURT:	District Court of Queensland
DELIVERED ON:	12 March 2007
DELIVERED AT:	Brisbane
HEARING DATE:	8 March 2007
JUDGE:	Alan Wilson SC, DCJ
ORDER:
CATCHWORDS:	APPEAL – STAY OF JUDGMENT PENDING APPEAL – principles upon which stay granted – terms of stay – where summary judgment granted for claim – where counterclaim arising out of same transaction as claim
Uniform Civil Procedure Rules, r 761
Cases considered: Alexander v Cambridge Credit Corporation Ltd [1985] 2 NSWLR 685 Croney v Nand [1999] 2 Qd R 342 Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 Federal Commissioner for Taxation v Myer Emporium Limited (1986) 160 CLR 220 Gray v Morris [2004] 2 Qd R 118 Griffiths v Australian Postal Commission (1987) 87 FLR 139 Portfolio Projects (Queensland) Pty Ltd v Crownhill (Overseas) Developments Pty Ltd [2007] QDC 009
COUNSEL:	D Morgan for applicant/defendant D J Thomae respondent/plaintiff
SOLICITORS:	JC Lawyers for applicant/defendant Bain Gasteen Lawyers for respondent/plaintiff

1. The respondent/plaintiff obtained summary judgment for about $170,000, interest and costs after a hearing before her Honour Judge Kingham on 6 February 2007. The judgment was given consequent upon reasons her Honour delivered on 14 February 2007[1]. The applicant/defendant has appealed that judgment and, in the face of a statutory demand from the plaintiff, now applies for a stay of it pending determination of the appeal.

   [1]            Portfolio Projects (Queensland) Pty Ltd v Crownhill (Overseas) Developments Pty Ltd [2007] QDC 009

2. As the pleadings in the action show, the parties entered into a written agreement described as a ‘project management agreement’ on 1 December 2003. The defendant was developing land at Slacks Creek and the plaintiff was to manage the construction of that development for a fee of $5,000 per month. It is common ground the fees have not been paid, and part of the plaintiff’s claim includes that monthly fee between December 2003 and January 2006, with interest. The plaintiff also sued for a smaller sum, about $10,000, as restitution for certain expenses incurred as part of the project.

3. The defendant resisted payment on the summary judgment application on several grounds, pointing to an oral agreement which was alleged to vary the terms of payment of the written contract, and also to allegations of breach of contract. The defendant also counterclaimed for $165,000 for damages for those breaches, and costs.

4. UCPR r 761 allows this Court, or the Court of Appeal, to grant a stay of a judgment after an appeal is brought. The test under that rule is whether or not the granting of a stay is an appropriate course, and the onus of establishing that lies upon the defendant: Croney v Nand [1999] 2 Qd R 342, at 348. The discretion arises in the context of the underlying principle that, ordinarily, a successful party is entitled to the fruits of litigation pending an appeal[2].

   [2]            Federal Commissioner for Taxation v Myer Emporium Limited (1986) 160 CLR 220, at 223

5. The respondent/plaintiff took no objection to an application in this Court, rather than the Court of Appeal.

6. The Notice of Appeal[3] shows the attack upon her Honour’s judgment is wide- ranging. It is alleged she failed to properly evaluate the defence pleaded by the defendant, wrongly determined triable issues in a summary way, failed to fully appreciate the defendant’s case as pleaded, and misconstrued the discretion available under UCPR r 292.

   [3]            Court of Appeal No 1739/07, filed 26 February 2007 and Exhibit “CEK2” to affidavit of Carl Edward Kurz sworn 2 March 2007.

7. As the Court of Appeal said in Croney v Nand, the prospects of success of the appeal are not a matter about which the court considering a stay application should generally speculate, although the process of assessing whether the appellant has an arguable case is usually undertaken to ensure the appeal has not been lodged simply to delay execution[4].

   [4]            Croney v Nand (supra) at 349; Alexander v Cambridge Credit Corporation Ltd [1985] 2 NSWLR 685, at 695; but, cf Griffiths v Australian Postal Commission (1987) 87 FLR 139, per Myles CJ at

8. Her Honour’s reasons are, with respect, careful and comprehensive. Materially, as her Honour noted, the plaintiff’s smaller claim for restitution was effectively conceded by the defendant, whose Counsel admitted there were no real prospects of successfully defending it. As to the plaintiff’s contractual claim, the reasons fully reveal the basis for her Honour’s conclusion that, if a variation of the kind alleged by the defendant was proven, the critical element of it – that, as a precondition of payment, the defendant would obtain ‘project finance’- had, in any event, been met.

9. As her Honour also observed, the defence did not provide particulars of the damages alleged to have been caused by the plaintiff’s breaches and neither, significantly, was the counterclaim set off.

10. The discretion involved in the exercise of determining whether or not summary judgment should be entered is not, of course, without its complexities, or potential for judicial disagreement: see, for example, the different views expressed about the appropriate test in Gray v Morris [2004] 2 Qd R 118 and Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232.

11. It was argued, for the applicant/defendant, that the fact the counterclaim is still on foot and arises out of the same facts and circumstances as the plaintiff’s action is a matter of considerable moment to the discretion arising now. The continued existence of that claim is, certainly, relevant but the rather surprising fact it was not pleaded as a set off must also be taken into account.

12. The discretion falls for consideration in the context of a commercial transaction in which the plaintiff established, by its evidence before me, that it is a corporation of substance. In addition, the defendant has shown that, whether or not it has substantial and ready funds, it does have a not unrealistic expectation of substantial income in the foreseeable future. The defendant’s appeal, while not without its obvious difficulties, is not unarguable and cannot be described as plainly intended to delay judgment.

13. The fact the applicant/defendant is now exposed to execution of a judgment obtained in a summary way, without the opportunity to ventilate the evidence it may have to rebut the plaintiff’s claims, repair its pleadings, or simultaneously prosecute its counterclaim must also be relevant to the discretion.

14. These circumstances attract the conclusion that, subject to appropriate security reflecting the benefit of the judgment the plaintiff holds, it would be within the ambit of the discretion to exercise it here. The judgment was an accelerated one (only in the sense, of course, that it was obtained summarily; her Honour’s consideration of the matter was plainly exhaustive); the defendant’s case was less than polished or, it might be thought, fully prepared; there is a counterclaim which involves the same issues and which is, if successful (and properly pleaded), capable of being offset; the sum involved, while large, is not apparently critical to the plaintiff’s financial survival; and, the appeal is not plainly unmeritorious or filed only for the purposes of delay.

15. The plaintiff’s position may be protected in a variety of ways. Traditionally, payment of some or all of the judgment sum into court, or a form of escrow, is considered. Prior to the hearing of this application the plaintiff offered to agree to a stay if the judgment sum was paid into its solicitor’s trust account. During argument the possibility of security by way of an irrevocable bank guarantee was also raised.

16. This is not a case in which the judgment sum arises after all the parties’ claims and financial transactions have been exposed to the stark light of a full trial, with the added veneer of certitude that attaches. At the same time, the plaintiff has the benefit of a summary judgment obtained on notice, after full argument, and supported by carefully framed judicial Reasons.

17. These factors dictate that, as a condition of a stay, the full amount of the judgment ought to be made available to the respondent/plaintiff by the applicant/defendant but, also, that if adequate security can be provided actual payment may not need to be compelled. A bank guarantee or similar security may be apposite, but I will hear further submissions about that matter, and costs.