Siemens WLL v BIC Contracting LLC (stay)

[2023] FCA 1669

FEDERAL COURT OF AUSTRALIA

Siemens WLL v BIC Contracting LLC (stay) [2023] FCA 1669

File number:	NSD 1152 of 2021
Judgment of:	STEWART J
Date of judgment:	22 December 2023
Catchwords:	PRACTICE AND PROCEDURE – stay of orders setting aside garnishee order – prejudice to applicants if stay not granted – risk of harm to garnishee and other third parties – balance of convenience
Division:	General Division
Registry:	New South Wales
National Practice Area:	Commercial and Corporations
Sub-area:	Commercial Arbitration
Number of paragraphs:	10
Date of hearing:	22 December 2023
Counsel for the Applicants:	C Harris
Solicitor for the Applicants:	Clayton Utz
Counsel for the Respondent:	The Respondent did not appear.
Counsel for the garnishee, LMENA Pty Ltd:	D Harris
Solicitor for the garnishee, LMENA Pty Ltd:	Allens

ORDERS

NSD 1152 of 2021

BETWEEN:

SIEMENS W.L.L.

First Applicant

SIEMENS AKTIENGESELLSCHAFT

Second Applicant

AND:

BIC CONTRACTING LLC

Respondent

LMENA PTY LTD

Garnishee

ORDER MADE BY:	STEWART J
DATE OF ORDER:	22 DECEMBER 2023

THE COURT ORDERS THAT:

1.Order 3 of the orders made on 11 September 2023 be vacated.

2.The garnishee order for debts issued upon LMENA Pty Ltd on 11 September 2023 be set aside.

3.The applicants, jointly and severally, pay LMENA Pty Ltd’s costs.

4.The parties have liberty to apply to vary order 3 by filing and serving any evidence and brief submissions in support of any such variation by 16 February 2024, in which event:

(a)any party opposing the variation file and serve any evidence and brief submissions in opposition within seven days thereafter;

(b)the party applying for the variation file and serve brief submissions in reply within seven days thereafter; and

(c)subject to further order, the application for variation be determined on the papers.

5.The above orders be stayed until 5:00pm on 5 January 2024.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
(delivered ex tempore, revised from transcript)

STEWART J:

1. On making orders this morning setting aside the garnishee order made on 11 September 2023, Ms Harris on behalf of the applicants applied for a stay of the orders until 5:00pm on 29 January 2024. Ms Harris helpfully handed up short minutes of order, which provide for additional orders governing the stay. The basic idea is that the applicants should have the opportunity to consider my reasons, which I handed down on making the orders, and take advice on whether or not to seek leave to appeal or, if leave to appeal is not required, to file a notice of appeal. The date of 29 January 2024 is calculated with reference to the time period allowed for the filing of an application for leave to appeal.

2. The essential considerations are any loss or prejudice to the party applying for the stay if the stay is not granted, any loss or prejudice to the garnishee (or other parties) if it is granted, and any balance of convenience.

3. Ms Harris draws particular attention to the prospect that the subject matter of the litigation, or at least a substantial part of it, may be lost if a stay is not granted. In that regard, there is a debt of US$1 million which is currently payable by the garnishee to the applicants’ judgment debtor, BICC, which may be paid imminently and thereby lost to the applicants in the sense of no longer possibly being subject to any garnishee order in this Court. 

4. There is a further sum of at least US$956,000, which I refer to in paragraph 18 of my reasons published today, which has accrued, and which will be payable at some time in the future. That sum is caught by the present garnishee order and there may indeed be a much greater sum, as referred to in paragraph 17 of my reasons published today.

5. Given that there is not yet any application for leave to appeal or notice of appeal, it is premature to make any assessment of the prospects of success of any such appeal. To be clear, what the applicants seek is the opportunity to consider their position and decide whether they wish to appeal against my judgment. 

6. There is evidence in the case that the delay in payment of the garnished debt to BICC may be creating, at the very least, difficulties, not only for BICC, which is not my concern, but also for other parties. In particular, those difficulties may cause harm to the garnishee and its holding company, CIMIC, as well as to SALD. Those matters are discussed in my reasons for judgment. The garnishee has been prevented by the garnishee order from properly paying its debt to BICC for some three months. Some of that time was granted as an indulgence to the applicants for them to complete their evidence. There is a limit to how much longer the garnishee should be subject to a garnishee order that I have found is beyond the Court’s reach and is, in any event, inappropriate.

7. In the circumstances, if no stay is granted and ultimately the applicants appeal and are successful on appeal, they may suffer loss. But equally, if a stay is granted, the garnishee, CIMIC and SALD may suffer further commercial harm.

8. I must balance those assessments of harm or prejudice against the applicants’ justified desire to be able to have time to consider their position. I am not satisfied that a stay to 29 January 2024 is justified. I am mindful of course that we are on the brink of the customary end of year shutdown, which makes any earlier time likely inconvenient to the practitioners involved. The point though is that the Court is always open for urgent business and commercial life continues, even when practitioners go on holiday.

9. I should make it clear that neither Ms Harris for the applicants, nor Mr Harris for the garnishee, have relied in any way on personal considerations of practitioners and holidays in their arguments. That is merely a consideration that I have raised. 

10. In all the circumstances, I consider that it is appropriate and justified to grant a shorter stay to give the applicants the opportunity to consider their position. I will therefore make an order 5 further to the orders I pronounced earlier this morning that those orders be stayed until 5:00pm on 5 January 2024. If any extension of the stay is sought before that time, I would expect that by then an application for leave to appeal would also have been filed.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stewart.

Associate:

Dated:       22 December 2023