Ribbera v Eagle Fuels Pty Ltd

[2014] VSCA 173

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2014 0060

PAUL RIBBERA

Appellant

v

EAGLE FUELS PTY LTD (ACN 136 452 429)

Respondent

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JUDGES:	NEAVE JA and GARDE AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	7 August 2014
DATE OF JUDGMENT:	7 August 2014
MEDIUM NEUTRAL CITATION:	[2014] VSCA 173
JUDGMENT APPEALED FROM:	Eagle Fuels Pty Ltd v Slidecross Pty Ltd & Anor [2014] VCC 596

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PRACTICE AND PROCEDURE – Application for stay of the judgment of a County Court judge – Application for security for costs of an appeal – Relevant principles to be applied – Application for a stay dismissed – Security for costs granted.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr B Gillies	Ferraro & Company Lawyers
For the Respondent	Mr A Kirby	Slater & Gordon

NEAVE JA:

1. I will ask Garde AJA to deliver his reasons.

GARDE AJA:

Introduction

1. There are two interlocutory applications before the Court. By a summons filed 8 July 2014, Paul Ribbera (‘the appellant’) seeks a stay of the judgment entered by her Honour Judge Kennedy in Eagle Fuels Pty Ltd v Slidecross Pty Ltd[1] pending the hearing and determination of the appeal. 

   [1][2014] VCC 596 (14 May 2014).

1. By a summons also filed on 8 July 2014, Eagle Fuels Pty Ltd (‘the respondent’) seeks security for its costs of the appeal by way of bank guarantee in the amount of $30,000 or, alternatively, $50,000 or in a form acceptable to the Registrar, and that the appeal be stayed until the security is lodged.

1. I will deal first with the appellant’s summons for a stay of the judgment.

1. In support of his summons, the appellant relies on his own affidavit of 14 July 2014.  The affidavit discloses that he has insufficient assets to meet the judgment debt of $100,000, together with interest of $9,976 and costs agreed at $50,000 with a stay of 30 days.

1. The appellant says that he works as a labourer and does not earn enough to pay the interest on the judgment debt.  He says that were the respondent to enforce the judgment against him, he would be forced to go bankrupt.  He says that if he succeeds on appeal he could not be restored to the position he was in before bankruptcy. 

1. In written submissions filed with the Court, the appellant refers to r 64.25(a) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic). This provides that an

appeal shall not operate as a stay of execution or of proceedings under the decision

appealed from unless the Court of Appeal or a Judge or Associate Judge otherwise orders. 

Principles governing the Court’s discretion to grant a stay

1. In Maher v Commonwealth Bank of Australia,[2] Dodds‑Streeton JA, with whom Redlich JA agreed, referred to the well‑established principles governing the exercise of the Court’s discretion to grant a stay of execution of judgment pending the hearing and determination of an appeal.  Similar principles or considerations have been stated in many other decisions, both subsequently and previously.[3] 

   [2][2008] VSCA 122.

   [3]See, eg, see Neate v Thoroughbred International Marketing Pty Ltd (2012) 34 VR 318 and Cellante v G Kallis Industries Pty Ltd [1991] 2 VR 653.

1. The first principle and starting point is that a successful party is entitled to the benefit of the judgment obtained below and the presumption is that the judgment is correct. 

1. Secondly, it is the applicant for a stay who bears the onus of demonstrating that a stay is justified.

1. A third principle relevant to the grant of a stay is whether there is a real risk that if the judgment is executed and later the appeal succeeds, it may not be possible to restore the appellant to the former position.  In this regard, the Court should take into consideration that the right of appeal should not be rendered nugatory. 

1. A fourth principle is that if an applicant for a stay has not demonstrated an appropriate case but has left the situation in a state of speculation or mere argument, weight must be given to the fact that the judgment below has been in favour of the other party.

1. A fifth and important principle is that the Court will take into account the prospects of success. The Court will make a preliminary assessment about whether there is an arguable ground of appeal.  The appellant cannot expect to succeed without showing that there is one.

1. The final principle is that the Court has a wide discretion that is not circumscribed by rigid rules.  It will take into account all the circumstances of the case. 

1. It may, of course, be difficult to give effect to all of these principles but the Court will do its best in the individual circumstances of the case.

The affidavits

1. The appellant relies on his affidavit sworn 14 July 2014.  In essence, he says, that his only assets are his residence in Thornbury jointly owned by his wife and said to be worth $790,000, and a boat and trailer said to be worth $55,000. 

1. There is a mortgage over his residence and another property amounting to $986,000 and a loan of $10,000 on the boat and trailer. 

1. The appellant says that were the judgment debt to be enforced he would be compelled to go into bankruptcy.  He says that his prospects on appeal are quite strong.

1. The respondent relies on two affidavits respectively sworn by a solicitor on 8 July 2014 and 14 July 2014.  Exhibited to the first affidavit is a statement of financial position prepared by and signed by the appellant and dated 21 February 2013.  This shows the appellant as having total assets of $2.052 million and total liabilities of $663,500, giving a surplus assets position of $1,388,500.  The statement shows a home loan of $220,000 and an investment loan of $400,000, both financed by the National Australia Bank. 

1. The second affidavit shows the mortgage to National Australia Bank to have been discharged on 22 April 2014, approximately three weeks before the trial before Judge Kennedy, and a much larger loan of $986,000 in favour of John and Rosemary Morriss registered on the title. 

Application of the principles

1. In my view the circumstances relating to the discharge of the mortgage in favour of the National Australia Bank and the acceptance of a much larger loan from other persons shortly before the trial in the County Court requires explanation by the appellant in his affidavit in support of a stay, or in a reply affidavit.  There has been a very marked deterioration in his financial position which requires transparency and greater disclosure by him.  No explanation has been forthcoming in the affidavit material filed on behalf of the appellant.

1. A second matter relates to the property at Thornbury, adjoining or nearby to the appellant’s home also in Thornbury. 

1. In his affidavit sworn 14 July 2014, the appellant deposes to the fact that the adjoining or nearby property at Thornbury ‘is and always has been owned solely by Cathy Ribbera’, who is his wife.  This statement is incorrect as on 18 December 2003, the property was transferred by the appellant and his wife, in her maiden name, to his wife as the sole registered proprietor.  As recently as 21 February 2013, a statement of financial position, signed by the appellant, shows him to be the owner of an investment property to the value of $850,000, the same value ascribed by him to his residence.  The contradiction in his asset position is unexplained by evidence from the appellant. 

1. I have given consideration to the prospects of success in the appeal.  There are four grounds of appeal relating to part of the reasons of the trial judge.  There is no challenge to any of the findings of fact made by her Honour and there now appear to be no disputed facts.  Rather, the appeal will turn on a legal argument that the guarantee was not an unlimited guarantee and a contention by the appellant that the trial judge should not have considered whether he as guarantor, consented to a change in the initial terms and conditions, assuming that there were any such terms and conditions in the first place.  It is not desirable that I say much in these reasons about the prospects of success apart from the observation that they have been considered and taken into account.

Conclusion as to stay application

1. In all of the circumstances, I am satisfied that the appellant has not discharged the onus of proof on him and that no stay should be granted.  The respondent should have the fruits of the decision below.

1. The appellant has not provided an explanation concerning significant matters as to his indebtedness and financial affairs.  The appellant has not explained how it comes about that his indebtedness has significantly deteriorated. 

1. After reviewing and applying the applicable principles, I am of the view that the respondent should be entitled to execute the judgment.  In my view, the appellant’s summons dated 8 July 2014 seeking a stay should be dismissed with costs.

Application for security for costs

1. As for the respondent’s application for security for costs, the affidavit in support shows the respondent’s solicitors requested security for costs in the amount of $30,000 promptly after the filing of the appeal on the basis that the respondent was seriously concerned that the appellant could not meet an adverse costs order.  At the hearing of the summons the respondent sought security for costs in the amount of $50,000.

1. No security for costs was provided by the appellant at that time, or subsequently.  

1. The principles which apply to applications for security for costs include:[4] 

   [4]Equity Access Ltd v Westpac Banking Corporation (1989) 16 IPR 431 and Maher v Commonwealth Bank of Australia [2008] VSCA 122.

(1)       The prospects of success of the appeal;

(2)       The quantum of the risk that a costs order against the appellant would not be satisfied;

(3)       Whether the making of an order would be oppressive in that it would stifle a reasonably arguable appeal;

(4)       Whether any impecuniosity of the appellant arises out of the conduct complained of;

(5)       Whether there are any other aspects of public interest which weigh in the balance against such an order; and

(6)       Whether there are any particular discretionary matters peculiar to the circumstances of the case.

1. The first principle is concerned with the prospect of success of the appeal about which I have previously made some comments.  Again it is not desirable to say any more than that I have taken them into account.

1. Secondly, on the evidence before the Court there is, in my view, a significant risk that an adverse costs order might not be satisfied by the appellant.  Nor is this a case where the imposition of a security for costs order of modest amount in the overall scheme of things would stifle an appeal.

1. Insofar as the appellant may be impecunious, the impecuniosity is not the consequence of any action by the respondent.  Rather, the respondent is seeking to recover credit provided to the appellant’s company now in liquidation, for reasons not involving the respondent.

1. In my view, this is a case where the private rights of the parties stand to be resolved.  It is not a case where there is any public interest.

1. I referred previously to a number of matters which should affect the discretion of the Court.  I will not repeat them but adopt what I have earlier said in these respects.

1. The application for security for costs should be granted but, having regard to the limited issues which will be argued on the appeal, in the sum of $30,000. 

NEAVE JA:

1. I agree with the conclusion that is reached by Garde AJA for the reasons that he gives.  The draft orders sought by Eagle Fuels sought directions as to the conduct of the appeal.  These matters are more appropriately determined by the Judicial Registrar and we will not make orders about these matters. 

1. The orders of the Court are as follows: 

1.        The appellant provide security for the respondent’s costs of his appeal in the form of a bank guarantee or in a form acceptable to the Registrar of the Court of Appeal in the sum of $30,000 by 4pm on 29 August 2014.

2.        The appeal is stayed until the security so ordered is provided and the appeal is dismissed if security is not provided by 4pm on 29 August 2014.

3.        The appellant’s summons filed 8 July 2014 seeking a stay is dismissed.

4.        The appellant pay the respondent’s costs of the appellant’s summons filed 8 July 2014.

5.        The costs of the respondent’s summons filed 8 July 2014 for security for costs be costs in the appeal. 

6.        The parties have liberty to apply to the Judicial Registrar for further directions.

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