Roberts & Anor v Bass

[2001] HCATrans 63

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A39 of 2000

B e t w e e n -

GEOFFREY MARK ROBERTS and KENNETH ALLAN CASE

Applicants

and

RODNEY PIERS BASS

Respondent

Application for a stay

McHUGH J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON WEDNESDAY, 14 MARCH 2000, AT 4.32 PM

Copyright in the High Court of Australia

MR P.A. HEYWOOD-SMITH:  If your Honour pleases, I appear for the applicant.  (instructed by David Wilson)

MR N.J.T. SWAN:  If your Honour pleases, I appear for the respondent.  (instructed by Lempriere Abbot & McLeod)

HIS HONOUR:   Yes, Mr Swan.

MR HEYWOOD-SMITH:   If your Honour pleases, this is my client’s application for a stay of execution of a judgment of the Supreme Court of South Australia pending application for special leave to appeal to this Court.  Can I take it that your Honour has received the application and the ‑ ‑ ‑

HIS HONOUR:   Yes, I have read all the materials.  I have read the special leave materials.  I have read the judgment of the Full Court of South Australia.  I have not read the trial judge’s judgment.  I have read all the documents filed by you in support of the summons.  It seems to me it is a case that, ordinarily, I would refuse this application, and the reason I would refuse it, ordinarily, is that you have made an application to the Supreme Court of South Australia, which has been refused.  Your case is a weak case for special leave.  That is not to say it is hopeless, but having read the material I think it is a weak case.

But you are in luck to this extent, that there is a special leave hearing on 6 April in Sydney and there is going to be a video link to Perth on that day and although it would add to the lists that the Court would be hearing, the Court could put this matter on via video link from Adelaide on 6 April.  In those circumstances, if you are ready to go on on 6 April, and subject to hearing what Mr Swan has to say, I would be prepared to grant a stay until the hearing on 6 April.  Now, are you in a position to be ready on 6 April?

MR HEYWOOD-SMITH:   Yes, your Honour.

HIS HONOUR:   Yes.  Might I say, Mr Heywood-Smith, that the statement of facts in the summary of argument seems to me to be another example of what Justice Gummow and I criticised in Hancock v Porteous recently and I think it would be in your interests to read what we said in that case and perhaps file another statement of the facts of the matter.  But having said that to you, I will ask Mr Swan what he has to say about the matter.

MR SWAN:   If your Honour pleases, we would be concerned at any stay. The materials that have been filed suggest that my client ‑ ‑ ‑

HIS HONOUR:   I have read the materials, and I must say they concern me.  One matter that concerned me, for example, is looking at the application for a stay on the matter that was before the Supreme Court, the applicant said he had no credit cards.  We now find from his affidavit that he has expended $70,000, so his equity in the house has reduced considerably since you got your verdict and that would be a matter that would have weighed heavily against me.

But that said, it is three weeks and subject to some fairly stringent conditions or as stringent as they can be made, one does not know how these applications will go.  Other Justices may see the matter differently from the way I see it, Mr Heywood‑Smith may be able to persuade me that there is more in the case than it appears to me at a first reading; but I must say his problem seems to me to be that what is involved here is question of fact, where you have concurrent findings either about knowledge or recklessness and so it seems a difficult case to get up on a special leave application, but he may be able to persuade me to the contrary.  Having read the papers, it did not seem to me that it was a very strong case for special leave, but it would not be the first time that my views have been changed by counsel’s oral argument.  Have you any conditions that you would like to put?

MR SWAN:   Your Honour, one of the things I was going to mention was the suggestion in the materials that our position is secured is really not correct, because the assets which are owned are joint assets. 

HIS HONOUR:   Yes. 

MR SWAN:   And so, of course, when one halves the property, one sees that, in effect, there are not enough assets ‑ ‑ ‑

HIS HONOUR:   I do not think there is enough there to cover your judgment, on a quick doing of the sums, even accepting the applicant’s version of the matter. 

MR SWAN:   Exactly, yes. 

HIS HONOUR:   There does not seem to be enough equity there to cover the verdict plus the costs, which, I would imagine, would be quite substantial. 

MR SWAN:   They are, if your Honour pleases. 

HIS HONOUR:   But are you going to be any worse off in 21 days, or 23 days? 

MR SWAN:   We will, in the sense that the applicant will have expended further moneys of his own on his costs, so if he goes bankrupt at the end of the day, we are that much worse off and, in effect, on that basis, every day that goes by, our position is deteriorating and, effectively, we are funding this application. 

HIS HONOUR:   Yes.  I understand the force of that, but there is something in the point that if leave is granted and the appeal would succeed, then it is not easy to unscramble the eggs, if there is a sale, although, undoubtedly, a sale would take some time. 

MR SWAN:   Yes. 

HIS HONOUR:   But I have given the matter considerable thought overnight and again this morning and I think, given some fairly stringent conditions, I would be prepared to make an order staying it until 6 April, Mr Swan. 

MR SWAN:   Yes, if your Honour pleases.  The sort of conditions we would be looking for are similar to those which were imposed at the Supreme Court level, namely, undertakings as to not, in effect, eating away the equity in the meantime.  For the reasons I have already put, we have some concerns about the efficacy of those, any way, given that we have got joint property involved.

HIS HONOUR:   There always is.  Was there any condition about further use of credit cards?  There does not seem to be.

MR SWAN:   No, there was not.  If your Honour pleases, at an earlier stage there was a lot of correspondence trying to seek details of financial position which really at the end of it came to nought.  That was exactly the sort of thing we were concerned about, in effect, the running up of other credit, and it appears that that is secured, as one would expect, by this security, assuming the bank has an all moneys‑type mortgage.

HIS HONOUR:   Yes.  Can you formulate some conditions that you would want, in addition to what was granted by Justice Wicks in the ‑ ‑ ‑

MR SWAN:   We had previously, and this was so at the Full Court level as well, an undertaking that until 28 days after judgment or determination here of the application for special leave the applicant would not dispose or further encumber the relevant properties and indeed we had an undertaking that he would not take any action to increase the indebtedness secured by the aforementioned mortgage.

HIS HONOUR:   It seems to me you also need an undertaking that he will continue to make the mortgage payments as well.

MR SWAN:   Yes.  We, of course, are concerned that that undertaking appears it may have been breached in any event, given that the credit card liability, if indeed that is secured by the mortgage, which we would have expected, and has increased over that period as your Honour points out it appears to have done from the affidavit material.

HIS HONOUR:   He said he had no credit cards in the original affidavit.

MR SWAN:   Yes, but the undertaking was to take no action to increase the indebtedness secured by the mortgage, so if in fact the mortgage secures a credit card debt as well, and it has run up, either that, or as your Honour points out, there has been a failure to disclose it then the undertaking has been breached.

HIS HONOUR:   Yes.

MR SWAN:   I suppose what I am saying about that is that the same undertaking, that is, not to take any action to increase the indebtedness secured by the mortgage, and as your Honour suggests, to continue to make the payments due under the mortgage, would be appropriate but we have a concern as to whether it is going to be abided by in any event.

HIS HONOUR:   Yes, well, there is a power of contempt in this Court which will be dealt with if there is a breach.

MR SWAN:   Yes.  Does your Honour want me to run through those words again?

HIS HONOUR:   Yes.

MR SWAN:   Yes.  Until 28 days after the application for special leave is determined ‑ ‑ ‑

HIS HONOUR:   Not until 28 days; until the date of special leave application is ‑ ‑ ‑

MR SWAN:   Your Honour, our concern was, and this was a concern we put to the Full Court previously, that if it is only to that date, then, of course, there is nothing to stop the applicant the day after going out and ‑ ‑ ‑

HIS HONOUR:   I see.  Yes, I understand.  Yes.

MR SWAN:   So until 28 days after the application for special leave is determined, the applicant will not dispose or further encumber the properties at 22 Noritake Road, Modbury Heights, or 15 Noritake Road, Modbury Heights, or take any action to increase the indebtedness secured by the said properties.

HIS HONOUR:   That is the two of them, the one at 22 and the one at 52?

MR SWAN:   Yes, the number is wrong on the – we had a number of 15 previously which was supplied.

HIS HONOUR:   Well, that appears ‑ ‑ ‑

MR SWAN:   I think it is 15 and 22, your Honour.

HIS HONOUR:   Yes, they appear in the applicant’s affidavit.

MR SWAN:   Yes.  That would be sufficient, if your Honour pleases.

HIS HONOUR:   What about the payment of the debt?

MR SWAN:   Thank you, your Honour.  Further, that the applicant undertakes to make all payments due to Bank SA pursuant to the loan secured by the mortgage over the said properties.

HIS HONOUR:   The other matter that you would want some protection of is an undertaking not to incur any further personal loans, because in the event of bankruptcy this would all ‑ ‑ ‑

MR SWAN:   Yes.  I think that is all I can suggest that may be of some assistance to us, your Honour.

HIS HONOUR:   Yes, thank you.  Mr Heywood-Smith, you have heard the discussion.  What do you say about giving those undertakings?

MR HEYWOOD-SMITH:   Your Honour, I have instructions to give those undertakings save in this respect, that so far as the last form of words, the undertaking not to incur any further personal loans, I am concerned that that might inhibit the applicant in – I am not instructed as to what arrangements he has about his legal costs associated with the special leave application only, but I am concerned that that may place him in a difficult position in that respect.

HIS HONOUR:   I appreciate that problem but, on the other hand, the respondent is entitled to the fruits of its verdict and he runs the risk that if you run up any further debt, it reduces the funds available to him.  On your own showing, there does not seem to me enough equity in these two properties to pay the verdict and the costs, which I would assume would probably be close to the verdict itself.  How long did the trial last?

MR HEYWOOD-SMITH:   Some ten days, your Honour.

HIS HONOUR:   Ten days on appeal to the Full Court.  There would be lucky to be any change out of 100,000 in those circumstances, I would imagine.

MR HEYWOOD-SMITH:   Your Honour, there is – not that I want to particularly complicate matters, but there was an error in the affidavit of the applicants that has been corrected by an affidavit of today that has been forwarded to my friend, but I understand it was unable to be filed at Adelaide in the High Court Registry, but it does assert that there is an error in paragraphs 4(k) and (l) of the affidavit, and page 3 of the application book, in that the two sums referred to there are the same sum.  There is, in fact, an interlocking arrangement in respect of that credit card and that overdraft.  So, in that sense, the affidavit presents a less gloomy picture than is actually the case, but that does ‑ ‑ ‑

HIS HONOUR:   But even accepting that, on his affidavit, he has properties worth 315,000, which are jointly owned, so one is talking of $157,000 is his interest.  He says “I have a loan”.  I do not know whether he means his wife has, but assuming, in his favour, that the pair of them have the loan, that is 55,000 from his interest, and then there is this overdraft of 70,000.  So even if only 35,000 of it is payable by him, it seems that there is probably an equity of less than $60,000 or $70,000 to pay the verdict and the costs.

I am concerned to protect the respondents, so I have to tell you quite frankly, if this application was not going to be heard so quickly, I do not think that your case could get off the ground for a stay, Mr Heywood‑Smith.  So, I am afraid your client will have to undertake the conditions along the lines I have proposed or the matter will just have to be left at large.

MR HEYWOOD-SMITH:   I am instructed to give that undertaking, if your Honour pleases.

HIS HONOUR:   Yes, the position he finds himself in is tragic, that is unbelievable that it has led to this, but so be it, it is all water under the bridge now, subject to your right to make your special leave application and from your point of view, get leave.

So I am prepared to grant a stay of the judgment on condition that until 28 days after 6 April, that you undertake not to dispose of or further encumber your interest in the property or to take any action that would increase the indebtedness that is secured by the mortgages.  Further, that you will undertake to make payments to the bank of $860 per month and that you will undertake not to enter into any further personal loans during the period up until 28 days after 6 April.  Now, do you give that undertaking on behalf of your client?

MR HEYWOOD-SMITH:   Yes, that is given. 

HIS HONOUR:   Yes.  The undertaking having been given, I will stay the execution of this judgment for a period expiring 28 days after 6 April. 

MR HEYWOOD-SMITH:   Your Honour, I wonder if I might – the judgment would not need to be stayed for the 28 days.  In fact, the whole point of the undertaking going for the 28 days beyond 6 April is so that we could execute from 6 April. 

HIS HONOUR:   Yes.  I follow. 

MR HEYWOOD-SMITH:   In other words, the assets are preserved but the judgment could then be executed on. 

HIS HONOUR:   Unfortunately, on the papers I have, I do not have the orders that were made by Justice Wicks.  Was a copy of the order of Justice Wicks filed in this matter, do you know? 

MR HEYWOOD-SMITH:   Your Honour, it is page 4 of the affidavit of the applicant, in paragraph 8, about halfway down page 4 ‑ ‑ ‑

HIS HONOUR:   Yes. 

MR HEYWOOD-SMITH:   A third of the way down ‑ ‑ ‑

HIS HONOUR:   Yes, I see that.  I will just write out the order so that there will be no mistake about it. 

Now, Mr Swan, let me tell you what I have written.  That on the undertaking of the applicant:

(1)  not to dispose of or further encumber his interests in the properties, at 15 and 22 Noritake Road, Modbury Heights, or to increase his indebtedness in respect of the money secured by mortgage on those properties;

(2)  not to enter into personal loans;

(3)  to pay the sum of $860 per month to BankSA Modbury Branch

up to 4 May 2001, I stay the execution of the judgment until 6 April 2001 or further order of this Court. 

Does that satisfy ‑ ‑ ‑

MR SWAN:   Yes, I am content with that, your Honour.

HIS HONOUR:   Yes.  Mr Heywood-Smith, you have heard me read that undertaking.  Do you give the undertaking that I have read?

MR HEYWOOD-SMITH:   Yes, that is given, if your Honour pleases.

HIS HONOUR:   Yes, thank you.  The undertaking being given in accordance with what I read out, I stay the execution of the judgment in the action until 6 April 2001 for further order of this Court.  I certify for counsel.  What about costs?  I think you will have to pay the costs, Mr Heywood-Smith.  You are the one that seeks the indulgence.

MR HEYWOOD-SMITH:   If your Honour pleases.

HIS HONOUR:   Yes.  I order the applicant to pay the respondent’s costs of this application.  Anything further, gentlemen?

MR HEYWOOD-SMITH:   No, your Honour.

MR SWAN:   No, your Honour.

HIS HONOUR:   Yes, adjourn the Court.

AT 5.00 PM THE MATTER WAS CONCLUDED