Tovegold Pty Limited v Lawson Hill Estate Pty Limited - [2005] FCA 205

FEDERAL COURT OF AUSTRALIA
Tovegold Pty Limited v Lawson Hill Estate Pty Limited [2005] FCA 205
TOVEGOLD PTY LIMITED T/AS MCGREGOR FIRST NATIONAL REAL ESTATE AND O’BRIEN v LAWSON HILL ESTATE PTY LIMITED AS TRUSTEE OF LAWSON HILL ESTATE TRUST AND ORS
N 56 of 2005
GRACE v LAWSON HILL ESTATE PTY LIMITED AS TRUSTEE OF LAWSON HILL ESTATE TRUST AND ORS
N 91 of 2005
DALTON v LAWSON HILL ESTATE PTY LIMITED AS TRUSTEE OF LAWSON HILL ESTATE TRUST AND ORS
N 1928 of 2004
JACOBSON J
1 MARCH 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 56 OF 2005

BETWEEN:

TOVEGOLD PTY LIMITED T/AS MCGREGOR FIRST NATIONAL REAL ESTATE
FIRST APPELLANT

TIM O’BRIEN
SECOND APPELLANT

AND:

LAWSON HILL ESTATE PTY LIMITED AS TRUSTEE OF LAWSON HILL ESTATE TRUST (ACN 096 523 241)
FIRST RESPONDENT

JOSE JOHN HAROLD GRACE
SECOND RESPONDENT

JUNE GRACE
THIRD RESPONDENT

JUDGE:

JACOBSON J

DATE OF ORDER:

1 MARCH 2005

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The Notice of Motion filed on 20 January 2005 by the first appellant is dismissed.

2.The first appellant is to pay the costs of the motion filed 20 January 2005.

3.Pursuant to Order 37 rule 10, execution of the judgment of his Honour Justice Wilcox of 10 December 2004 is stayed against the Second Appellant, pending the determination of the appeal, conditional upon Ace Insurance Limited providing to the solicitors for the successful applicants a bond in form and substance satisfactory to the solicitors for the successful applicants for the full amount of the judgment debt and the costs of the hearing before Wilcox J in an amount to be assessed or taxed. Such bond is to be provided by 4pm, Friday 4 March 2005.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 91 OF 2005

BETWEEN:

JOSE JOHN HAROLD GRACE
FIRST APPELLANT

AND:

LAWSON HILL ESTATE PTY LIMITED AS TRUSTEE OF LAWSON HILL ESTATE TRUST (ACN 096 523 241)
FIRST RESPONDENT

TOVEGOLD PTY LIMITED T/AS MCGREGOR FIRST NATIONAL REAL ESTATE
SECOND RESPONDENT

TIM O’BRIEN
THIRD APPELLANT

JOHN MICHAEL DALTON
FOURTH RESPONDENT

JUDGE:

JACOBSON J

DATE OF ORDER:

1 MARCH 2005

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

The Notice of Motion filed 14 February 2005 is refused.

The appellants are to pay the respondent’s costs of the motion.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 1928 OF 2004

BETWEEN:

JOHN MICHAEL DALTON
APPELLANT

AND:

LAWSON HILL ESTATE PTY LIMITED AS TRUSTEE OF LAWSON HILL ESTATE TRUST (ACN 096 523 241)
FIRST RESPONDENT

JUNE GRACE
SECOND RESPONDENT

JOSE JOHN HAROLD GRACE
THIRD RESPONDENT

JUDGE:

JACOBSON J

DATE OF ORDER:

1 MARCH 2005

WHERE MADE:

SYDNEY

THE COURT ORDERS by consent THAT:
The First Respondent consents to the orders sought by the appellant in his Notice of Motion filed 4 February 2005 that:
1.Pursuant to Order 37 rule 10, execution of the judgment of his Honour Justice Wilcox of 10 December 2004 be stayed against the Appellant pending;

Further order of the court, or

Determination of the Appellant’s appeal in respect of his honour’s judgment.

There be no order as to costs.

The Second Respondent consents to the orders sought by the appellant in his Notice of Motion filed 4 February 2005 that:
1.The Order for costs in favour of the second respondent by his Honour Justice Wilcox of 10 December 2004 be stayed against the Appellant pending;

Further order of the court, or

Determination of the Appellant’s appeal in respect of his honour’s judgment.

2.There be no order as to costs.

The Third Respondent consents to the orders sought by the appellant in his Notice of Motion filed 4 February 2005 that:
1.The Order for contribution in the amount of 25% against the appellant by his Honour Justice Wilcox of 10 December 2004 be stayed against the Appellant pending;

Further order of the court, or

Determination of the Appellant’s appeal in respect of his honour’s judgment.

2.There be no order as to costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 56 OF 2005

BETWEEN:

TOVEGOLD PTY LIMITED T/AS MCGREGOR FIRST NATIONAL REAL ESTATE
FIRST APPELLANT

TIM O’BRIEN
SECOND APPELLANT

AND:

LAWSON HILL ESTATE PTY LIMITED AS TRUSTEE OF LAWSON HILL ESTATE TRUST (ACN 096 523 241)
FIRST RESPONDENT

JOSE JOHN HAROLD GRACE
SECOND RESPONDENT

JUNE GRACE
THIRD RESPONDENT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 91 OF 2005

BETWEEN:

JOSE JOHN HAROLD GRACE
FIRST APPELLANT

AND:

LAWSON HILL ESTATE PTY LIMITED AS TRUSTEE OF LAWSON HILL ESTATE TRUST (ACN 096 523 241)
FIRST RESPONDENT

TOVEGOLD PTY LIMITED T/AS MCGREGOR FIRST NATIONAL REAL ESTATE
SECOND RESPONDENT

TIM O’BRIEN
THIRD APPELLANT

JOHN MICHAEL DALTON
FOURTH RESPONDENT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 1928 OF 2004

BETWEEN:

JOHN MICHAEL DALTON
APPELLANT

AND:

LAWSON HILL ESTATE PTY LIMITED AS TRUSTEE OF LAWSON HILL ESTATE TRUST (ACN 096 523 241)
FIRST RESPONDENT

JUNE GRACE
SECOND RESPONDENT

JOSE JOHN HAROLD GRACE
THIRD RESPONDENT

JUDGE:

JACOBSON J

DATE:

1 MARCH 2005

PLACE:

SYDNEY

REASONS FOR JUDGMENT

I have before me today three applications by the unsuccessful respondents to proceedings before Wilcox J for a stay of execution on the judgment.
The applications are brought pursuant to Order 37 Rule 10 and Order 52 Rule 17 of the Federal Court Rules. His Honour's judgment was delivered on 10 December 2004. There were three groups of unsuccessful respondents. The first was the vendor of the subject property. I will refer to that group as “the Graces”. The second interest may be described as the vendor's real estate agent on the sale of the property. I will refer to that interest as “O'Brien”. The third interest is that of Mr Dalton, who is a water drilling contractor.
The proceedings against the respondents were brought principally under ss 52, 75B and 82 of the Trade Practices Act1974 (Cth). His Honour ordered that judgment be entered in favour of the first applicant, (“Lawson”), against O'Brien, Mr Grace (but not his wife) and Dalton in the sum of $705,589. His Honour also ordered all of the respondents to pay the costs of the proceedings. His Honour did enter judgment in favour of the respondents on various cross-claims for contribution to ensure that the "following ultimate burden" of the payment of the monies be 10% for O'Brien, 65% for Mr Grace and 25% for Mr Dalton.
I gave directions for filing of affidavits in support of notices of motion brought by the Graces, O'Brien and Mr Dalton. I need not say much about Mr Dalton's application because Lawson and Mr Dalton entered into consent orders this morning which provided for a stay of execution on the judgment pending the hearing of the appeal.
There was evidence before me on Mr Dalton's application that he has an asset comprising a property at Landsdowne Drive, Raglan, which he apparently owns with his wife and which is described as the matrimonial home. It does not appear from the affidavit that he has other substantial assets. The property is said to be valued at $500,000 but there is a substantial mortgage over the property.
O'Brien's evidence in support of the application for a stay consisted only of a copy of his Honour's judgment and a number of other formal matters including the notice of appeal which has been filed against his Honour's judgment.
Mr Grace's motion was not supported by any affidavit evidence filed in accordance with my directions but this morning, counsel for Mr Grace filed in court an affidavit of the solicitor for the Graces.
The affidavit states that Mr Grace's only asset of substance is a half share of what is apparently the matrimonial home at 17 Stratford Way, Burradoo, New South Wales. The affidavit states that the Graces are conducting settlement negotiations and that they require additional time before the judgment.
Mr Grace is 71 years of age. His wife is 75 years of age. She appears to be in ill health and reference is made to the stress under which Mrs Grace is suffering because of the risk of a writ of execution and dispossession following upon his Honour's judgment.
Although, as I have said, O'Brien's evidence was purely formal, this morning counsel for O'Brien informed me that O'Brien has a licensed insurer standing behind it and after some discussion an insurance bond was offered in the full amount of the judgment of $705,589.
The principles which apply on an application such as this are clearly established. The cases make it clear that a successful party is entitled to the fruits of the judgment. It is not necessary for an applicant to show exceptional circumstances, but an applicant for a stay must demonstrate a reason which is appropriate to warrant the exercise of a discretion in his or her favour. Each case is to be determined on its own merits. Matters of rigid principle do not apply but certainly weight is to be given to the fact that the judgment has been given in favour of another party.
I will deal firstly with the application by the Graces. It is unfortunate that the affidavit on which they rely was filed only this morning. This did not give counsel for Lawson, Mr Fernon, the opportunity to test the statements that were made in it.
It seems to me that Mr Fernon is correct that there is no proper evidence in the affidavit of the financial or personal circumstances of the Graces. I am also entitled to take into account the fact that the notice of appeal does not seem to raise any issue of law but seems to be a challenge to the factual findings made by his Honour and it is important to bear in mind that, as his Honour said at [56], that at the trial there was no serious challenge to the non-corporate applicant's evidence about reliance; indeed most of them were not required for cross-examination.
I am not satisfied on the sketchy material put before me by the Graces that it is appropriate to grant a stay in accordance with the principles to which I have referred. I also take into account the fact that the only real challenges appear to be to factual findings, that is not to deny that such evidence as I do have before me suggests that the Graces are suffering some considerable stress as a result of the judgment. However, the principles are clear and in my opinion there is no basis for the exercise of my discretion to grant a stay of the judgment against them.
Turning then to the position of O'Brien, the evidence filed in support of the application made no case for a stay. There was no evidence of the financial position of O'Brien. There was no affidavit evidence to suggest that Lawson or the other successful applicants in the proceedings would be unable to pay the judgment debt if it was satisfied prior to the hearing of the appeal. However, it does seem to me that the offer which was made this morning is a matter which warrants the exercise of my discretion to grant a stay. It is a circumstance which I can take into account.
I can also take into account the fact that no stay is ordered on the Graces application. I have been told, as I have said, that a licensed insurer stands behind O'Brien. The name of the licensed insurer is Ace Insurance Limited. The offer which has been made extends only to the amount of the judgment debt. It does not include an offer to provide a bond for the costs order. Mr McManus, for O'Brien, has urged upon me the fact that Wilcox J apparently thought that a proper apportionment of the liability is in the proportions that I have already mentioned. He also points to his Honour's finding at [116] that the case is a "borderline one against O'Brien".
That is a matter which I think I can take into account in the exercise of my discretion and the effect of what is offered this morning is that there will be security for the full amount of the judgment ordered against O'Brien. That recognises the fact that the judgment is joint and several and also recognises the fact that it is up to O'Brien to enforce the contribution orders made by Wilcox J as they presently stand or perhaps as varied on appeal. Mr Fernon argued strongly this morning that an exercise of discretion in favour of O'Brien would deprive his client of the fruits of the judgment.
He pointed out that there was no evidence to suggest that Lawson or the other successful applicants could not repay the judgment debt if it was satisfied before the hearing of the appeal. He pointed to a decision of Gyles J in Australian Solar Mesh Sales Pty Ltd v Anderson [1999] FCA 964. There, his Honour observed that the onus of making good the proposition that there is no reasonable probability of getting the monies back lies on the appellant, however, not a great deal need be shown in order to throw the onus back upon the respondent. Here, Lawson is the trustee of a unit trust.
It is clear from the facts which emerged in Wilcox Js judgment that the corporate trustee would have a right of indemnity out of the assets including the real estate. The evidence established that the value of the property in 2001 was $550,000. Mr Fernon therefore submitted that his clients would be in a position to repay the judgment debt if it was paid in full by O'Brien. He also pointed to the fact that it is a judgment for costs which would be jointly and severally enforceable against O'Brien. He said from the bar table, and I do not criticise him for doing it in this way, that substantial costs have been incurred in an amount of about $250,000 of which $150,000 is outstanding.
The reason I am not being critical of him is that no real evidence was put on before the hearing of today's application and it was therefore necessary for Mr Fernon to respond to much of what was said at the eleventh hour. Notwithstanding Mr Fernon's forceful submissions it seems to me that, consistently with the well-established authorities, sufficient has been put to me to amount to a reason which is appropriate to warrant the exercise of the discretion in O'Brien's favour. The offer which has been made does not include legal fees. The question which arises is whether I ought to impose as a condition of the grant of a stay, a bond from the insurer for the judgment debt and legal expenses.
Mr McManus submits that when one looks at the whole of his Honour's judgment, the borderline nature of the case that his Honour said existed against O'Brien and the finding that O'Brien's proportion as between the other respondents ought to be 10%, it would be wrong to impose as a condition of a stay, a bond for the full amount of the judgment debt and costs. He submitted that I should take into account the view which I have reached that there be no stay on the Graces application. He pointed to the fact that there is some evidence of the Graces financial position in the affidavit to which I have referred.
However, it does seem to me that the submissions put by Mr McManus fail to pay regard to the full weight of his Honour's orders which impose a joint and several liability on O'Brien for the judgment debt and legal fees. I have already indicated that I could not safely rely upon what appeared in the affidavit filed on behalf of the Graces as to their financial position and I cannot be satisfied that the successful applicant would be able to obtain much or any comfort from a realisation of the Graces assets.
Accordingly, it seems to me that the proper exercise of my discretion, which is really to preserve so far as possible the fruits of victory following from his Honour's judgment is that I will grant a stay on the application of O'Brien conditional upon Ace Insurance Limited providing to the solicitors for the successful applicants a bond in form and substance satisfactory to the solicitors for the successful applicants for the full amount of the judgment debt and the costs of the hearing before Wilcox J in an amount to be assessed or taxed, such bond to be provided by 4 p.m. on Friday, 4 March 2005.
The orders will then be that the Graces pay the costs of the motion of 14 February 2005 and I order O'Brien to pay the costs of the motion filed on 20 January 2005.

I certify that the preceding twenty four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.
Associate:
Dated: 9 March 2005

Counsel for Tovegold Pty Limited: Mr McManus

Solicitor for Tovegold Pty Limited: Colin Biggers & Paisley Lawyers

Counsel for Grace: Mr Burwood

Solicitor for Grace: Doyle Wilson

Counsel for Dalton: Mr Gruzman

Solicitor for Dalton: Pike & Associates

Counsel for the Respondent: Mr Fernon

Solicitor for the Respondent: Henderson Taylor Workplace Lawyers

Date of Hearing: 1 March 2005

Date of Judgment: 1 March 2005

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 56 OF 2005

BETWEEN:	TOVEGOLD PTY LIMITED T/AS MCGREGOR FIRST NATIONAL REAL ESTATE FIRST APPELLANT TIM O’BRIEN SECOND APPELLANT
AND:	LAWSON HILL ESTATE PTY LIMITED AS TRUSTEE OF LAWSON HILL ESTATE TRUST (ACN 096 523 241) FIRST RESPONDENT JOSE JOHN HAROLD GRACE SECOND RESPONDENT JUNE GRACE THIRD RESPONDENT
JUDGE:	JACOBSON J
DATE OF ORDER:	1 MARCH 2005
WHERE MADE:	SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 91 OF 2005

BETWEEN:	JOSE JOHN HAROLD GRACE FIRST APPELLANT
AND:	LAWSON HILL ESTATE PTY LIMITED AS TRUSTEE OF LAWSON HILL ESTATE TRUST (ACN 096 523 241) FIRST RESPONDENT TOVEGOLD PTY LIMITED T/AS MCGREGOR FIRST NATIONAL REAL ESTATE SECOND RESPONDENT TIM O’BRIEN THIRD APPELLANT JOHN MICHAEL DALTON FOURTH RESPONDENT
JUDGE:	JACOBSON J
DATE OF ORDER:	1 MARCH 2005
WHERE MADE:	SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1928 OF 2004

BETWEEN:	JOHN MICHAEL DALTON APPELLANT
AND:	LAWSON HILL ESTATE PTY LIMITED AS TRUSTEE OF LAWSON HILL ESTATE TRUST (ACN 096 523 241) FIRST RESPONDENT JUNE GRACE SECOND RESPONDENT JOSE JOHN HAROLD GRACE THIRD RESPONDENT
JUDGE:	JACOBSON J
DATE OF ORDER:	1 MARCH 2005
WHERE MADE:	SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 56 OF 2005

JUDGE:	JACOBSON J
DATE:	1 MARCH 2005
PLACE:	SYDNEY

Counsel for Tovegold Pty Limited:	Mr McManus
Solicitor for Tovegold Pty Limited:	Colin Biggers & Paisley Lawyers
Counsel for Grace:	Mr Burwood
Solicitor for Grace:	Doyle Wilson
Counsel for Dalton:	Mr Gruzman
Solicitor for Dalton:	Pike & Associates
Counsel for the Respondent:	Mr Fernon
Solicitor for the Respondent:	Henderson Taylor Workplace Lawyers
Date of Hearing:	1 March 2005
Date of Judgment:	1 March 2005