Rabah Enterprises Pty Ltd v LCM Operations Pty Ltd - [2023] NSWCA 203

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Rabah Enterprises Pty Ltd v LCM Operations Pty Ltd [2023] NSWCA 203
Hearing dates: 28 August 2023
Date of orders: 30 August 2023
Decision date: 30 August 2023
Before: Basten AJA
Decision:
(1)   Until the 28th day after the entry of orders disposing of the appeal, stay:
(a)   order 1 made by Rees J on 2 June 2023 as varied on 28 June 2023;
(b)   order 3 made by Rees J (with respect to the costs of the trial) on 2 June 2023 as varied on 28 July 2023; and
(c)   the writ for the levy of property issued on 22 June 2023.
(2)   Order 1 will remain in operation subject to compliance by the appellant with the following conditions:
(a)   the appellant shall not sell, dispose of, transfer, deal with, diminish the value of, or encumber any interest it has in lots 6, 13-14 and 37-51 of Strata Plan 93010;
(b)   the appellant shall not sell, dispose of, transfer, deal with, diminish the value of, or encumber any interest it has in any jewellery, watches and diamonds (valuables) acquired from the drawdown of the loan facility, the subject of the facility agreement with the National Australia Bank dated 28 June 2023, save that the appellant may sell or dispose of the valuables and pay the proceeds of sale into its NAB bank account, and funds in that account may not be transferred or expended during the period of the stay except to pay legal fees incurred in relation to the appeal or to pay into Court the sum identified in (c) below;
(c)   the appellant shall no later than close of business on Wednesday, 6 September 2023, pay into Court the sum of $495,000; and
(d)   the appellant is to comply with any direction given by a judge or the Registrar for the expeditious hearing and disposal of the appeal.
(3)   The costs of the motion shall be costs in the appeal.
(4)   Grant the parties liberty to apply to a judge of the Court on 48 hours’ notice.
(5)   Otherwise dismiss the appellant’s notice of motion filed on 21 August 2023.

Catchwords:
PRACTICE and PROCEDURE – appeal – application for stay pending hearing of appeal – appellant owned 18 lots in strata plan subject to mortgage to bank – appeal reasonably arguable – appeal likely to be heard and determined in four months – attempts to sell lots likely to trigger default on mortgage – sales not likely to be completed before appeal determined – stay granted subject to conditions designed to protect value of appellant’s assets

Legislation Cited:
Civil Procedure Act 2005 (NSW), s 135
Uniform Civil Procedure Rules 2005 (NSW), r 51.44

Cases Cited:
Kalifair Pty Ltd v Digi-Tech (Australia) Limited (2002) 55 NSWLR 737; [2002] NSWCA 383
Port Macquarie Hastings Council v Diveva Pty Ltd t/as Mid Coast Road Services [2017] NSWCA 4

Category: Procedural rulings
Parties: Rabah Enterprises Pty Ltd (Appellant)
LCM…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NSWCA 203
Decision Date: 30 August 2023

CaseChat Overview and Summary

In *Rabah Enterprises Pty Ltd v LCM Operations Pty Ltd*, the appellant, Rabah Enterprises Pty Ltd, sought a stay of certain orders made by Rees J, pending the determination of an appeal. The dispute concerned 18 lots owned by the appellant within a strata plan, which were subject to a mortgage to a bank. The appellant argued that attempts to sell these lots to satisfy the judgment debt would likely trigger a default under the mortgage, and that sales were unlikely to be completed before the appeal was heard.

The primary legal issue before Basten AJA was whether to grant a stay of execution of the orders made by Rees J, specifically the order for possession, the costs order, and the writ for the levy of property. The court was required to consider the strength of the appellant's grounds of appeal and the potential prejudice to the parties if a stay was or was not granted.

Basten AJA reasoned that the appeal was reasonably arguable and that the appeal was likely to be heard and determined within approximately four months. The court found that the appellant's attempts to sell the lots, which were necessary to avoid default on the mortgage, would likely be frustrated by the execution of the judgment. To balance the competing interests, the court granted a stay of the specified orders, subject to strict conditions designed to protect the value of the appellant's assets and ensure the efficacy of the appeal process. These conditions included prohibitions on selling or encumbering certain lots and valuables, a requirement to pay a significant sum into court, and an obligation to comply with directions for the expeditious hearing of the appeal.

Orders

Orders of the court

(1) Until the 28th day after the entry of orders disposing of the appeal, stay:

(a) order 1 made by Rees J on 2 June 2023 as varied on 28 June 2023;

(b) order 3 made by Rees J (with respect to the costs of the trial) on 2 June 2023 as varied on 28 July 2023; and

(2) Order 1 will remain in operation subject to compliance by the appellant with the following conditions:

(a) the appellant shall not sell, dispose of, transfer, deal with, diminish the value of, or encumber any interest it has in lots 6, 13-14 and 37-51 of Strata Plan 93010;

(b) the appellant shall not sell, dispose of, transfer, deal with, diminish the value of, or encumber any interest it has in any jewellery, watches and diamonds (valuables) acquired from the drawdown of the loan facility, the subject of the facility agreement with the National Australia Bank dated 28 June 2023, save that the appellant may sell or dispose of the valuables and pay the proceeds of sale into its NAB bank account, and funds in that account may not be transferred or expended during the period of the stay except to pay legal fees incurred in relation to the appeal or to pay into Court the sum identified in (c) below;

(c) the appellant shall no later than close of business on Wednesday, 6 September 2023, pay into Court the sum of $495,000; and

(d) the appellant is to comply with any direction given by a judge or the Registrar for the expeditious hearing and disposal of the appeal.

(3) The costs of the motion shall be costs in the appeal.

(4) Grant the parties liberty to apply to a judge of the Court on 48 hours’ notice.

(5) Otherwise dismiss the appellant’s notice of motion filed on 21 August 2023.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Rabah Enterprises Pty Ltd v LCM Operations Pty Ltd [2023] NSWCA 203
Hearing dates:	28 August 2023
Date of orders:	30 August 2023
Decision date:	30 August 2023
Before:	Basten AJA
Decision:	(1) Until the 28th day after the entry of orders disposing of the appeal, stay: (a) order 1 made by Rees J on 2 June 2023 as varied on 28 June 2023; (b) order 3 made by Rees J (with respect to the costs of the trial) on 2 June 2023 as varied on 28 July 2023; and (c) the writ for the levy of property issued on 22 June 2023. (2) Order 1 will remain in operation subject to compliance by the appellant with the following conditions: (a) the appellant shall not sell, dispose of, transfer, deal with, diminish the value of, or encumber any interest it has in lots 6, 13-14 and 37-51 of Strata Plan 93010; (b) the appellant shall not sell, dispose of, transfer, deal with, diminish the value of, or encumber any interest it has in any jewellery, watches and diamonds (valuables) acquired from the drawdown of the loan facility, the subject of the facility agreement with the National Australia Bank dated 28 June 2023, save that the appellant may sell or dispose of the valuables and pay the proceeds of sale into its NAB bank account, and funds in that account may not be transferred or expended during the period of the stay except to pay legal fees incurred in relation to the appeal or to pay into Court the sum identified in (c) below; (c) the appellant shall no later than close of business on Wednesday, 6 September 2023, pay into Court the sum of $495,000; and (d) the appellant is to comply with any direction given by a judge or the Registrar for the expeditious hearing and disposal of the appeal. (3) The costs of the motion shall be costs in the appeal. (4) Grant the parties liberty to apply to a judge of the Court on 48 hours’ notice. (5) Otherwise dismiss the appellant’s notice of motion filed on 21 August 2023.
Catchwords:	PRACTICE and PROCEDURE – appeal – application for stay pending hearing of appeal – appellant owned 18 lots in strata plan subject to mortgage to bank – appeal reasonably arguable – appeal likely to be heard and determined in four months – attempts to sell lots likely to trigger default on mortgage – sales not likely to be completed before appeal determined – stay granted subject to conditions designed to protect value of appellant’s assets
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 135 Uniform Civil Procedure Rules 2005 (NSW), r 51.44
Cases Cited:	Kalifair Pty Ltd v Digi-Tech (Australia) Limited (2002) 55 NSWLR 737; [2002] NSWCA 383 Port Macquarie Hastings Council v Diveva Pty Ltd t/as Mid Coast Road Services [2017] NSWCA 4
Category:	Procedural rulings
Parties:	Rabah Enterprises Pty Ltd (Appellant) LCM…