Traderight (NSW) Pty Ltd (ACN 108 880 968) and Ors v Bank Of Queensland Limited (ACN 009 656 740) (No 18) and 13 related matters

Case •

[2014] NSWSC 733

•

06 June 2014

Supreme Court


New South Wales

Medium Neutral Citation: Traderight (NSW) Pty Ltd (ACN 108 880 968) & Ors v Bank Of Queensland Limited (ACN 009 656 740) (No 18) and 13 related matters [2014] NSWSC 733
Hearing dates:19/05/2014
Decision date: 06 June 2014
Before: Ball J
Decision:

See paragraph 65 of this judgment

Catchwords: PROCEDURE - civil - interlocutory issues - application to reopen - whether party at fault by failing to address issues in submissions
PROCEDURE - civil - judgments and orders - stay pending appeal
COSTS - agreements - construction - whether contractual provisions provide for costs on indemnity basis
COSTS - exception to the general rule that costs follow the event - multiple issues - whether defences raised dominant or severable
Legislation Cited: Civil Procedure Act 2005 (NSW)
Evidence Act 1995 (NSW)
Independent Contractors Act 2006 (Cth)
Industrial Relations Act 1996 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Abigroup Ltd v Sandtara Pty Ltd [2002] NSWCA 45
Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685
Andrews v John Fairfax & Sons Ltd [1979] 2 NSWLR 184
Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300
Bank of Queensland Limited v Industrial Court of New South Wales [2008] FCA 324; (2008) 170 IR 457
Bank of Queensland Limited v Industrial Court of New South Wales (No 2) [2008] FCA 1435
Blessington v The Queen [2007] HCA 51; (2007) 234 CLR 38
Boreland v Docker [2007] NSWSC 53
Commonwealth of Australia v Gretton [2008] NSWCA 117
De L v Director-General, New South Wales Department of Community Services (No 2) [1997] HCA 14; (1997) 190 CLR 207
Dicks v Yates (1881) 18 Ch D 76
Eberlein v Eberlein (1887) 8 LR (NSW) Eq 1
Ex parte Permanent Trustee Co (1897) 14 WN (NSW) 61
Foster v Great Western Railway Co (1882) 8 QBD 515
GIO General Ltd v Passau [2013] NSWSC 682
GR Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263
Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 145
Hodgkins v District Council of Burnside (1892) 25 SALR 37
HP Mercantile Pty Ltd v Dierickx (No 2) [2002] NSWSC 1430
In the matter of Cheal Industries Pty Ltd - Fitzpatrick v Cheal [2012] NSWSC 932
James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296
Kalifair Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737
Knight v Clifton [1971] Ch 700; [1971] 2 All ER 378
Kyabram Property Investments Pty Ltd v Murray [2005] NSWCA 87
Kyabram Property Investments Pty Ltd v Murray [2006] NSWSC 54
London Welsh Estates Ltd v Phillip (1931) 144 LT 643
Macquarie International Health Clinic Pty Limited v Sydney South West Area Health Service (No 3) [2010] NSWSC 1139
Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15
National Australia Bank Ltd v Chen-Conway [2008] NSWSC 485
New South Wales Bar Association v Stevens [2003] NSWCA 95
Ottway v Jones [1955] 1 WLR 706
Paringa Mining and Exploration Co Plc v North Flinders Mines Ltd (No 2) [1988] HCA 53; (1988) 165 CLR 452
Rail Corporation NSW v Leduva Pty Ltd [2005] NSWSC 138
Rossmick No 1 Pty Ltd v Bank of Queensland Limited [2008] FCAFC 81
Rossmick No 1 Pty Ltd v Bank of Queensland [2012] NSWCA 85
Stirling Harbour Services Pty Ltd v Bunbury Port Authority (No 2) [2000] FCA 87
Sydney Ferries v Morton (No 2) [2010] NSWCA 238
Traderight (NSW) Pty Ltd v Bank of Queensland Limited (No 9) [2012] NSWSC 154
Traderight (NSW) Pty Ltd v Bank of Queensland Limited (No 12) [2012] NSWSC 1363
Traderight (NSW) Pty Ltd & Ors v Bank Of Queensland Limited (No 17) [2014] NSWSC 55
Turkmani v Visvalingam (No 2) [2009] NSWCA 279
Verna Trading Pty Ltd v New India Assurance Co Ltd [1991] 1 VR 129 (App Div(Vic))
Waterman v Gerling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111
Waters v P C Henderson (Australia) Pty Ltd [1994] NSWCA 338; (1994) 254 ALR 328
Wilson v Church (No 2) (1879) 12 Ch D 454
Yazgi v Permanent Custodians Ltd (No 2) [2007] NSWCA 306
Category:Costs
Parties: Traderight (NSW) Pty Ltd (ACN 108 880 968) (First Plaintiff in 06/258216; First Defendant in 06/258225)
Bronwyn Smith (Second Plaintiff in 06/258216; Second Defendant in 06/258225)
Geoffrey Versace (Third Plaintiff in 06/258216; Third Defendant in 06/258225)
Smith Partners Developments Pty Ltd (Fourth Plaintiff in 06/258216; Fourth Defendant in 06/258225)
Verich Holdings Pty Ltd (Fifth Plaintiff in 06/258216; Fifth Defendant in 06/258225)
Bank of Queensland Limited (ACN 009 656 740) (Defendant in 06/258216; Plaintiff in 06/258225; First Defendant/Cross Claimant in 08/282126; First Defendant in 09/287816; First Defendant/Cross Claimant in 08/282304; First Defendant in 09/287824; Defendant/Cross Claimant in 10/367117; Defendant/Cross-Claimant in 08/281332; Plaintiff/First Cross Defendant in 08/279848; First Defendant in 09/287814; Defendant/Cross Claimant in 10/367086; Defendant/Cross Claimant in 10/305568; Defendant/Cross Claimant in 10/306022; Defendant/Cross Claimant in 10/304306)
Rossmick No 1 Pty Limited (First Plaintiff/First Cross Defendant in 08/282126; First Plaintiff in 09/287816)
Rossmick No 2 Pty Limited (Second Plaintiff/Second Cross Defendant in 08/282126; Second Plaintiff in 09/287816)
Michael Bradley (Third Plaintiff/Third Cross Defendant in 08/282126; Third Plaintiff in 09/287816)
Ross Chapman (Fourth Plaintiff/Fourth Cross Defendant in 08/282126; Fourth Plaintiff in 09/287816)
Luke Nolan (Fifth Plaintiff/Fifth Cross Defendant in 08/282126; Fifth Plaintiff in 09/287816)
Tomala No 1 Pty Ltd (ACN 110 321 698) (Sixth Plaintiff/Sixth Cross Defendant in 08/282126; Sixth Plaintiff in 09/287816)
Casmick Pty Ltd (ACN 110 292 012) (Seventh Plaintiff/Seventh Cross Defendant in 08/282126; Seventh Plaintiff in 09/287816)
Nolan No 1 Pty Ltd (ACN 110 019 426) (Eighth Plaintiff/Eighth Cross Defendant in 08/282126; Eighth Plaintiff in 09/287816)
Nadine Nolan (Ninth Plaintiff/Ninth Cross Defendant in 08/282126; Ninth Plaintiff in 09/287816)
David Liddy (Second Defendant in 08/282126; Second Defendant in 09/287816; Second Defendant in 09/287824; Second Cross Defendant in 08/279848; Second Defendant in 09/287814)
Jude Financial Services Pty Ltd (ACN 115 763 481) (First Plaintiff/First Cross Defendant in 08/282304; First Plaintiff in 09/287824)
Russell Jude Edward Gardner (Second Plaintiff/Second Cross Defendant in 08/282304; Second Plaintiff in 09/287824)
Penelope Ann Gardner (Third Plaintiff/Third Cross Defendant in 08/282304; Third Plaintiff in 09/287824)
Donna Quinn (Third Defendant in 08/282126; Third Defendant in 09/287816; Fourth Defendant in 09/287824)
Garry Allsop (Fourth Defendant in 09/287816; Fourth Defendant in 08/282126; Fourth Defendant in 09/287816; Third Defendant in 09/287824; Third Cross Defendant in 08/279848)
Shamarbre Pty Ltd (First Plaintiff/First Cross Defendant in 10/367117)
Ronald George Johnson (Second Plaintiff/Second Cross Defendant in 10/367117)
Geraghty & Palmer (NSW) Pty Ltd (First Plaintiff/First Cross Defendant in 08/281332)
Shauna Margaret Geraghty (Second Plaintiff/Second Cross Defendant in 08/281332)
Barry Palmer (Third Plaintiff/Third Cross Defendant in 08/281332)
SME Business Assist Pty Limited (ACN 108 524 232) (First Defendant/First Cross Claimant in 08/279848; First Plaintiff in 09/287814)
Scott Rolfe McCoy (Second Defendant/Second Cross Claimant in 08/279848; Second Plaintiff in 09/287814)
Leokate Pty Ltd (ACN 111 162 068) (First Plaintiff/First Cross Defendant in 10/367086)
Stephen Sargent (Second Plaintiff/Second Cross Defendant in 10/367086)
Lauren Sargent (Third Plaintiff/Third Cross Defendant in 10/367086)
Best Deal Pty Limited (ACN 119 366 433) (First Plaintiff/First Cross Defendant in 10/305568)
Jeffrey Bruce Jones (Second Plaintiff/Second Cross Defendant in 10/305568)
LJH Group Pty Limited (ACN 123 507 497) (First Plaintiff/First Cross Defendant in 10/306022)
Leslie Xu (Second Plaintiff/Second Cross Defendant in 10/306022)
Jin Yu Yang (Third Plaintiff/Third Cross Defendant in 10/306022)
Southpole Financial Services Pty Ltd (ACN 123 930 012) (First Plaintiff/First Cross Defendant in 10/304306)
Harunur Rashid Chowdhury (Second Plaintiff/Second Cross Defendant in 10/304306)
Md Iftekhar Tarek Hassan (Third Plaintiff/Third Cross Defendant in 10/304306)
Md Ikthedar Hassan Murad (Fourth Plaintiff/Fourth Cross Defendant in 10/304306)
Representation: Counsel:
NA Cotman SC with RD Glasson (OMB Parties)
S Couper QC with JV Gooley (Bank Parties)
Solicitors:
McCabes (OMB Parties)
HWL Ebsworth (Bank Parties)
File Number(s):
Publication restriction:Nil

Judgment

Introduction

  1. This judgment deals with a number of ancillary issues arising from the principal judgment I delivered in these proceedings on 13 February 2014 (Traderight (NSW) Pty Ltd & Ors v Bank Of Queensland Limited (No 17) [2014] NSWSC 55). Terms defined in that judgment have the same meaning in this judgment.

  1. In the principal judgment, I concluded that the claims made by the OMB Parties should be dismissed. Orders to that effect were made by the Court on 14 April 2014. In the principal judgment, I also concluded that the Bank should have judgment in its favour on the claims that it made. Those claims related to the recovery by the Bank of amounts it had lent to the OMB Parties in connection with their franchises. At the time of delivering the principal judgment, I directed that the Bank bring in short minutes of order to give effect to the findings I had made and directed that the parties arrange for the matter to be relisted to deal with any issues concerning those short minutes of order and other issues that I had reserved in my principal judgment for further consideration.

  1. The outstanding issues fall into 3 categories.

  1. First, in the Rossmick No 2 proceeding, the Rossmick No 2 Parties make an application to reopen my judgment to deal with the question whether amounts said to have been recovered by the Bank pursuant to a fixed and floating charge the Bank held over the property of Rossmick No 2 should be set off against amounts claimed by the Bank. That leave is opposed by the Bank. Second, there is the question of costs. The OMB Parties submit that the Bank should pay their costs, or at least should bear its own costs, in relation to certain issues on which the Bank failed. The Bank seeks to recover its costs on an indemnity basis, on the basis of a contractual entitlement. That application is opposed by the OMB Parties. In addition, Bentham IMF Limited, which provided funding to the OMB Parties and which provided an undertaking to the Court on 28 April 2011 to meet any costs orders in favour of the Bank, sought to be joined as a party to the proceedings for the purpose of making submissions in relation to whether the Bank had a contractual entitlement to indemnity costs and, if it did, whether it should be relieved of its undertaking insofar as the undertaking extended to the payment of indemnity costs arising from contracts between the Bank and the OMB Parties. I refused that leave but permitted Bentham IMF to make submissions on the question whether the Bank had a contractual entitlement to indemnity costs. The third issue is whether the OMB Parties are entitled to a stay of each judgment in favour of the Bank.

Rossmick No 2's application to reopen

  1. Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 36.16(1) provides:

The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order.

  1. The power granted by UCPR r 36.16 should be exercised cautiously. As Toohey, Gaudron, McHugh, Gummow and Kirby JJ explained in De L v Director-General, New South Wales Department of Community Services (No 2) [1997] HCA 14; (1997) 190 CLR 207 at 215:

The power of this Court to reopen its judgments or orders is not in doubt. The Court may do so if it is convinced that, in its earlier consideration of the point, it has proceeded "on a misapprehension as to the facts or the law", where "there is some matter calling for review" or where "the interests of justice so require". It has been said repeatedly that a heavy burden is cast upon the applicant for reopening to show that such an exceptional course is required "without fault on his part", ie without the attribution of neglect or default to the party seeking reopening. By such expressions of the power to reopen final orders, courts seek to recognise competing objectives of the law. On the one hand, there is the principle of finality of litigation which reinforces the respect that should be shown to orders, final on their face, addressed to the world at large and upon which conduct may be ordered reliant upon their binding authority. On the other hand, courts recognise that accidents and oversights can sometimes occur which, unrepaired, will occasion an injustice. [footnotes omitted]

See also Autodesk Inc v Dyason (No 2) [1993] HCA 6; (1993) 176 CLR 300 at 302 per Mason CJ; Blessington v The Queen [2007] HCA 51; (2007) 234 CLR 38 at [32].

  1. In the present case, the Bank claimed in the relevant cross-claim that Rossmick No 2 was indebted to the Bank in the sum of $57,729.15 plus interest. In response to that claim, the Rossmick No 2 Parties pleaded in their defence to the cross-claim that:

22(d)(i) [the Bank] has sold the asset (being the fit-out of the Hurstville OMB) securing the Hurstville BTL [Business Term Loan] and has been paid any amount alleged to be owing under the Hurstville BTL by way of the proceeds of sale of the said asset; and
22(d)(ii) [the Bank] has received an economic benefit from the use of the asset ... which economic benefit exceeds the amount alleged to be owing under the Hurstville BTL.
...
23(b) ... by reason of paragraph 22(d) above, the Bank has received funds or benefits or a combination of funds and benefits equal to or greater than the alleged outstanding amount from sources that were required to be applied to the alleged outstanding amount.

The amount the Bank was alleged to have received was in fact the amount of $385,000 the Bank received from LJH Group for the sale of the Hurstville OMB to it after the Bank took possession of the OMB from Rossmick No 2.

  1. The Bank did not file a reply to the allegations contained in paras 22(d) and 23(b) of the defence to the cross-claim.

  1. The Rossmick No 2 Parties made no reference in their oral or written submissions to the defence. They conceded in para 2915 of the written submissions filed by the OMB Parties that, if the various agreements between the Rossmick No 2 Parties and the Bank were not set aside and if Rossmick No 2 was not awarded damages in an amount that was in excess of the amounts due under those agreements, then they were liable for the amounts claimed by the Bank, properly calculated. The Bank did not deal with the issue in its submissions; and the issue was not dealt with in the principal judgment.

  1. The Bank makes two submissions in relation to this issue. First, it submits that leave to reopen should not be given, since the failure to raise the issue did not occur without fault on the part of Rossmick No 2. Second, it submits that, even if leave to reopen is given, the defence must fail.

  1. In my opinion, it is appropriate to give the Rossmick No 2 Parties leave to reopen the case to permit them to argue the point that they wish to raise. The proceedings were very complicated. They raised a large number of issues. The failure to deal with the particular issue in submissions was clearly an oversight that can be explained by the large number of issues in the case. The mere fact that the issue was not addressed as a result of an oversight does not mean that the Rossmick No 2 Parties were at fault in the sense required. In De L, the issue on which leave to reopen was given (concerning whether the Court had power to make the costs order it did) was not raised by the Director-General due to an oversight. However, the Court still granted leave to the Director-General to reopen the case to raise that issue. The present case is not one where the Rossmick No 2 Parties seek to make further submissions in relation to an issue that had already been dealt with in submissions and on which they failed. It is a case where they simply overlooked dealing with a discrete point that was clearly raised on the pleadings. The issue does not require further evidence. It goes to the amount the Bank is entitled to recover, which was not an issue that I determined at the time I delivered my principal judgment.

  1. However, in my opinion, the Rossmick No 2 Parties are not entitled to a reduction in the judgment amount to take account of money received by the Bank from the sale of the Hurstville OMB to LJH Group.

  1. Clause 31.3 of the OMB Agency Agreement relevantly provides:

(a) If the Bank terminates this Agreement pursuant to clause 31.2(g) [providing for termination without cause on 30 days' notice], the Bank will pay to the Agent the Compensation Amount.
...
(c) The Agent acknowledges that the Compensation Amount includes full compensation for the fit-out for the Premises and all other costs, expenses and losses and that the Agent is not entitled to any further compensation in relation to the termination of this Agreement.

  1. It is accepted that the Bank terminated the Rossmick No 2 OMB Agency Agreement under cl 31.2(g) and that it has given Rossmick No 2 credit for the Compensation Amount.

  1. It is plain from the terms of cl 31.3 that the Compensation Amount includes an amount for the fit-out of the premises. On payment of that amount, the Bank became entitled to the fit-out. It was then free to do with the branch, including the fit-out, what it wanted. It was not obliged to account to Rossmick No 2 for any amount that it subsequently received from the sale of the branch to another Owner Manager.

  1. It follows that the Bank is entitled to recover the amount that it claims.

Costs

Relevant legal principles

  1. The starting point in determining what order for costs should be made is s 98(1) of the Civil Procedure Act 2005 (NSW) which provides:

Subject to rules of court and to this or any other Act:
(a) costs are in the discretion of the court, and
(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and
(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.

  1. UCPR r 42.1 sets out the general principle to be applied by the court. It provides:

Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.

The "event" is generally taken to be the practical outcome of the proceedings. However, a successful party may be deprived of costs or ordered to pay the other party's costs in respect of an issue lost by the successful party where that issue was clearly dominant or severable: Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 145 at [15] per Hodgson JA citing Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 at [64]; Waters v P C Henderson (Australia) Pty Ltd [1994] NSWCA 338; (1994) 254 ALR 328. See also Turkmani v Visvalingam (No 2) [2009] NSWCA 279 at [9]-[13]; James v Surf Road Nominees (No 2) Pty Ltd [2005] NSWCA 296 at [31]-[33]. In Commonwealth of Australia v Gretton [2008] NSWCA 117 at [121], Hodgson JA expressed the principle in these terms:

In my opinion, underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs. Costs follow the event generally because, if a plaintiff wins, the incurring of costs was the defendant's responsibility because the plaintiff was caused to incur costs by the defendant's failure otherwise to accord to the plaintiff that to which the plaintiff was entitled; while if a defendant wins, the defendant was caused to incur costs in resisting a claim for something to which the plaintiff was not entitled: cf Ohn v Walton (1995) 36 NSWLR 77 at 79 per Gleeson CJ. Departures from the general rule that costs follow the event are broadly based on a similar approach.

  1. In the past, courts took the view that they had no jurisdiction to make costs orders against wholly successful defendants, since it was the plaintiff not the defendant who elected to commence the proceedings: Dicks v Yates (1881) 18 Ch D 76; Foster v Great Western Railway Co (1882) 8 QBD 515; Eberlein v Eberlein (1887) 8 LR (NSW) Eq 1; Hodgkins v District Council of Burnside (1892) 25 SALR 37 at 38 per Way CJ; Ex parte Permanent Trustee Co (1897) 14 WN (NSW) 61; London Welsh Estates Ltd v Phillip (1931) 144 LT 643. That position no longer represents the law: Knight v Clifton [1971] Ch 700 at 710 per Russell LJ, at 715 per Sachs LJ, at 724 per Buckley LJ; [1971] 2 All ER 378; GR Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263, although it has been suggested that the court will more readily order a successful plaintiff to bear or to pay the costs of a severable claim than it will order a successful defendant to bear or to pay the costs of a severable defence: see Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 145 at [20] per Hodgson JA, referring to Yazgi v Permanent Custodians Ltd(No 2) [2007] NSWCA 306 at [24]-[25] and Sydney Ferries v Morton (No 2) [2010] NSWCA 238 at [18]-[19]. Commenting on those two cases, Hodgson JA said:

In the former case, the defendant has been caused to incur costs in defending a claim which the decision in the case has wholly rejected, and has thus determined should not have brought about the incurring of any costs at all. In those circumstances, it may be considered appropriate that the defendant have costs associated with reasonable defences, even if they ultimately proved to be unsuccessful and severable. In the latter case, the plaintiff has chosen to bring the whole proceedings and thereby to incur costs and cause costs to be incurred which otherwise would not have been incurred; and in those circumstances, it may be seen more readily as appropriate that the plaintiff be liable for the costs of unsuccessful severable claims or issues, even if it was reasonable to include those claims or issues.

See also Verna Trading Pty Ltd v New India Assurance Co Ltd [1991] 1 VR 129 (App Div(Vic)); Ottway v Jones [1955] 1 WLR 706.

  1. However, a differential approach has not found universal favour. For example, in HP Mercantile Pty Ltd v Dierickx (No 2) [2002] NSWSC 1430, White J declined to follow Hodgson JA's dictum in Griffith. He thought the distinction between the position of the plaintiffs and defendants was elusive. If the defendant did not suffer a costs penalty in respect of defences raised reasonably, it was difficult in his view to see why the same approach should not apply to claims that are raised reasonably. White J preferred to consider the position in each case having regard to the overall principle of fairness: at [20].

  1. As will become apparent, nothing turns in this case on which of these two approaches is preferable.

  1. Whether an issue is sufficiently discrete so as to attract a special costs order involves a question of characterisation that must be considered in the particular context of the case. It is not limited to cases where separate claims are made. It can relate to any disputed question of fact or law: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34]. Nonetheless, the court should be hesitant to depart from the general principle that costs should follow the event: Waterman v Gerling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111 at [10]; In the matter of Cheal Industries Pty Ltd - Fitzpatrick v Cheal [2012] NSWSC 932 at [181].

  1. There are various circumstances in which the court will award costs on an indemnity basis. Relevantly, it may be appropriate to award indemnity costs where the parties specifically agree that costs will be paid on that basis. The court ordinarily exercises its costs discretion to give effect to the contractual right: see Rail Corporation NSW v Leduva Pty Ltd [2005] NSWSC 138 at [26]-[34] per Nicholas J; Kyabram Property Investments Pty Ltd v Murray [2006] NSWSC 54 at [17]-[18] per Campbell J; Boreland v Docker [2007] NSWSC 53 at [114]-[117] per White J; National Australia Bank Ltd v Chen-Conway [2008] NSWSC 485. The court, however, is not bound to do so and any costs order remains at the court's discretion: Macquarie International Health Clinic Pty Limited v Sydney South West Area Health Service (No 3) [2010] NSWSC 1139 at [22] per Nicholas J; Abigroup Ltd v Sandtara Pty Ltd [2002] NSWCA 45 at [9] per Stein JA (with whom Giles JA and Young CJ in Eq agreed); Kyabram Property Investments Pty Ltd v Murray [2005] NSWCA 87 at [14] per Beazley JA (with whom Hodgson and Ipp JJA agreed).

The OMB Parties' submissions in relation to costs

  1. It is convenient to begin by considering the OMB Parties' submissions that they should not have to bear the costs of a number of issues, or should be entitled to their costs in relation to those issues. Those issues are:

  • The costs associated with the Bank's reasonable grounds defence;
  • The costs of the Bank's case based on the Representations Deed;
  • The costs of the Bank's claim seeking to recover from Traderight losses it had suffered on a number of bad debts;
  • The costs of the limitation defence in the psychiatric injury claims and the causation defence in "Geraghty and Leokate";
  • The costs of various interlocutory applications in relation to which the Bank was unsuccessful;
  • The costs of the Constitutional issue raised by the Bank in relation to the claim made by a number of OMB Parties under s 106 of the Industrial Relations Act 1996 (NSW) (the IR Act).

  1. Leaving aside the separate proceedings concerning the Constitutional issue for the moment, in my opinion, none of these issues warrants a separate costs order.

  1. As I have said, the case raised a large number of issues. It ran for approximately 100 hearing days. In my opinion, it was unnecessarily complicated and much of the blame for that lies at the feet of the plaintiffs. The Bank was put in a position where it had to contend with a large number of issues. It was successful in relation to many of them; and it was, of course, successful in each of the proceedings. Having regard to the way in which the case was run by the plaintiffs, there would be a degree of unfairness in depriving the Bank of part of its costs because, on a careful analysis, it is possible to identify some issues on which it was not successful.

  1. As the Bank points out, it was not wholly unsuccessful in relation to the reasonable grounds issue. I found that the Bank did have reasonable grounds for making some of the representations that it was alleged to have made. Moreover, it became unnecessary to deal in any detail with the question whether the Bank had reasonable grounds to rely on a number of representations (such as representations concerning the Bank's credit criteria) because the case based on those representations was largely abandoned by the OMB Parties.

  1. The principal issue in relation to the reasonable grounds defence was whether the Bank had reasonable grounds for making representations concerning the ability of an OMB to write $4 million per month in new lending. Even in relation to that representation, there was a question of what Mr Allsopp said. I concluded that Mr Allsopp may well have said that it was possible for an OMB to write $4 million worth of new lending each month without conveying the impression that that figure could or would be achieved by any particular OMB. I concluded that Mr Allsopp had reasonable grounds for making a representation in those terms.

  1. A substantial amount of evidence was directed at establishing that the Bank had reasonable grounds for believing that a metropolitan OMB could write loans of $4 million per month after approximately 4 months of operation and that, if it did so, it would break even within a reasonable period of time. Ultimately, the Bank failed to establish either limb of that proposition. But the reasons it failed were quite limited. Essentially, it failed because I was not satisfied that it had reasonable grounds for believing its own experience in Queensland and the experience of branches of other banks in New South Wales were comparable to the position of a new OMB operated by people without the necessary qualifications, experience and connections in New South Wales. Much of the material led by the OMB Parties in relation to reasonable grounds was largely irrelevant to the grounds on which the Bank failed; and if the reasonable grounds defence took up an unnecessary amount of time, the OMB Parties must bear some of the responsibility for that. A substantial part of the material relevant to the grounds on which the Bank failed - such as material concerning the qualifications and experience of the Owner Managers - was material that would have been led in any event. For those reasons, I do not think that the issue of reasonable grounds was a sufficiently distinct one on which the Bank lost to justify some special costs order.

  1. The Representations Deed was relevant to the question of reliance, as well as the claim raised by the Bank, although ultimately I did not rely on it for any of the conclusions I reached. A minimal amount of time in the case was spent on it. For those reasons, no special costs order should be made in relation to that part of the Bank's claim.

  1. In relation to the claim in the Traderight proceeding, the Bank claimed damages on the basis that Traderight, in breach of cl 7.5 of the OMB Agency Agreement, had failed to reimburse it for a number of bad debts which it alleged were attributable to the failure by Traderight or its personnel to observe the Bank's policies, practices and procedures. The Traderight Parties resisted that claim on two bases. First, they submitted that Traderight had not breached the relevant policies. Second, they alleged that the Bank had not proved that the debts were bad ones. I accepted the second submission, and did not deal with the first, although there was considerable evidence that Traderight had not complied with the relevant policies. Again, the issue on which the Bank lost took up so little time in the case that, in my opinion, it is not appropriate to seek to separate out those costs.

  1. As to the psychiatric injury claims, it was necessary in order to consider any limitation defence to consider the factual details of the claim. That factual material was relevant to other aspects of the claims, on which the relevant OMB Parties were unsuccessful. The limitation defences raised legal issues concerning the operation of those defences. However, those issues took up virtually no time in the overall context of the proceedings. In some cases, the Bank was only unsuccessful in relation to its limitation defences because I was not prepared to make an order concerning when the amendments made by the OMB Parties to raise the psychiatric injury claims should take effect, with the result that the amendments took effect when the original claim was filed. For those reasons, it is not possible to separate out the costs of the limitation defence from other aspects of the claim and it would not be appropriate to impose some separate costs order in respect of them.

  1. As the Bank pointed out in its submissions, it was not correct to say that the Bank lost on issues of causation in relation to the psychiatric injury claims. On the findings I made, any economic loss suffered by Mr and Mrs Sargent was not caused by the psychiatric illnesses from which they suffered. In any event, in my opinion, it is artificial to attempt to separate issues of reliance from issues of duty and breach in this case. The relevant OMB Parties brought claims based on psychiatric injuries they alleged they suffered as a consequence of the Bank's conduct. Those claims failed because the relevant OMB Parties failed to establish that they suffered a psychiatric injury as a consequence of any misleading or deceptive conduct, any unconscionable conduct or any negligent conduct of the Bank. Any attempt to divide the issues further for the purposes of determining the question of costs strikes me as artificial.

  1. The OMB Parties seek different costs orders in relation to 4 interlocutory applications. The first was an application by the OMB Parties to amend their claims to plead that the Bank engaged in misleading and deceptive conduct by silence. That application, which the Bank resisted, was partially successful: see Traderight (NSW) Pty Ltd v Bank of Queensland Limited (No 9) [2012] NSWSC 154. However, the claims themselves failed. In my opinion, it is appropriate that the costs of the motion follow the event. The Bank should not be penalised for resisting the bringing of a claim that failed.

  1. The second interlocutory application was an application brought by the Bank to obtain access to documents produced by Professor Burton, an expert on marketing called by the OMB Parties, in respect of which a claim for privilege was made. The Bank was unsuccessful in obtaining those documents. In the normal course of events, an order might have been made requiring the Bank to pay the OMB Parties' costs of that motion. However, no costs order was made at the time. As things transpired, Professor Burton's report was of no assistance and it is doubtful that it should ever have been served. In those circumstances, in my opinion, there is no reason to treat the costs of this application differently from the costs of the proceedings generally.

  1. The third interlocutory application was the Bank's application that the evidence of what Mr Allsopp was alleged to have said to each Owner Manager not be admitted as evidence of what he said to each other Owner Manager on the ground that it was tendency evidence that did not meet the requirements of s 97(1) of the Evidence Act 1995 (NSW). That motion was stood over to the trial and was ultimately not pressed by the Bank. Although some work was done by the OMB Parties in relation to the motion, the issue became wrapped up with the conduct of the trial. For those reasons, I do not think a separate costs order should be made in relation to that motion.

  1. The last interlocutory application in relation to which a special costs order is sought was an application made by the Bank that it be permitted to cross-examine Ms Chen in circumstances where her affidavit had been read but the LJH Group Parties chose not to make her available for cross-examination. I rejected that application: see Traderight (NSW) Pty Ltd v Bank of Queensland Limited (No 12) [2012] NSWSC 1363. In my opinion, that should not be treated as a separate application. It was an application concerning the general conduct of the trial and should be treated as part of the costs of the trial, which the OMB Parties should bear.

  1. In my opinion, the costs of what is referred to as the "Constitutional issue" fall into a different category.

  1. In the Rossmick, SME and JFS proceedings, the OMB Parties originally commenced proceedings in the Industrial Court of New South Wales seeking relief under s 106 of the IR Act. Those proceedings were transferred to this Court by order of Hamilton J made on 2 November 2007. However, prior to their transfer, the Bank commenced proceedings out of the Queensland registry of the Federal Court seeking prohibition against the Industrial Court to restrain it from hearing the proceedings then before it on the basis that the operation of s 106 of the IR Act was excluded by the Independent Contractors Act2006 (Cth) in relation to services contracts. An application by the OMB Parties to transfer those proceedings failed before Greenwood J (see Bank of Queensland Limited v Industrial Court of New South Wales [2008] FCA 324; (2008) 170 IR 457). Greenwood J also ordered that certain paragraphs of the defence filed by the OMB Parties be struck out. He reserved the question of costs. The OMB Parties appealed to the Full Court in relation to Greenwood J's decision to strike out certain paragraphs of the defence. That appeal was upheld in part and the Full Court ordered that the parties each bear their own costs of the hearing before it and at first instance: Rossmick No 1 Pty Ltd v Bank of Queensland Limited [2008] FCAFC 81 at [18]. The Full Court observed (at [6]) that no appeal lay against an order dismissing an application to cross-vest proceedings and concluded that it could not itself cross-vest the appeal before it.

  1. On 27 March 2008, the Bank amended its claim. The amended claim still sought prohibition against the Industrial Court despite the fact that Hamilton J had made orders transferring the proceedings to this Court in November 2007. The OMB Parties filed an amended defence on 7 July 2008 and the Bank sought to strike out paragraphs of that defence. That application was heard by Logan J, who ordered that various paragraphs be struck out: Bank of Queensland Limited v Industrial Court of New South Wales(No 2) [2008] FCA 1435. His Honour reserved the question of costs. The OMB Parties appealed that decision. The appeal was heard by the Full Court on 26 November 2008. During the course of argument, the Full Court raised serious concerns about proceeding to hear the appeal. One concern was that the proceedings before the Court and those before the Industrial Court (although in fact transferred) raised similar factual issues. Another was how it could be appropriate to seek prohibition against a State Industrial Court in the Federal Court, a course of action described by Spender J in argument "to be the most arrogant and highhanded application of the bank you could possibly imagine". Eventually, the Bank accepted that the appropriate course was for the appeal and underlying proceedings to be transferred to the Supreme Court and orders to that effect were made by consent.

  1. The appeal from Logan J then came before the Court of Appeal on 4 April 2012. At that time, the Court of Appeal stayed the cross-vested proceedings on the basis that any defence by the Bank to the claim under s 106 of the IR Act ought to be raised in these proceedings: see Rossmick No 1 Pty Ltd v Bank of Queensland [2012] NSWCA 85. The Court directed that the costs of the parties in the Court of Appeal should be costs in the proceedings which are the subject of my principal judgment. At [21], it also said this in relation to costs:

If, at the end of the day, there is reason to separate out particular costs for special orders, that can be done by the trial judge. As the costs of the constitutional proceeding in the Federal Court were reserved for determination in the Equity Division, it is convenient that the costs in this Court, which depend primarily on steps taken prior to the hearing in this Court, should also be determined by the trial judge.

  1. The position, then, appears to be this. The underlying proceedings that were before Logan J were transferred to the Equity Division of this Court and stayed by order of the Court of Appeal. The costs of the motion heard by Greenwood J in those proceedings were dealt with by the Full Court. Apart from that, no order for costs was made in those proceedings. It appears that it is open to me to deal with those costs now.

  1. The costs of the appeal from the decision of Logan J were not dealt with by the Full Court. However, the Court of Appeal ordered that the costs of the parties before it should be costs in the proceedings I have dealt with in my principal judgment; and it seems to me those costs must include the costs of the hearing before the Full Court, since those costs became costs in the proceedings that were before the Court of Appeal.

  1. I concluded in my principal judgment that the Bank's defence based on the Independent Contractors Act should succeed. Clearly, the Bank should have its costs of that defence.

  1. However, in my opinion, the proceedings that were stayed by the Court of Appeal should not have been commenced. As the Court of Appeal pointed out, there was a perfectly simple and orthodox means by which the Bank was able to raise its defence based on the Independent Contractors Act. The Bank submitted that it was reasonable to commence separate proceedings because those separate proceedings involved a discrete point which could be dealt with promptly and, had they been successful, would have disposed of the claim under the IR Act. I do not accept that submission. The defence based on the Independent Contractors Act depended on characterising the relationship between the Bank and the relevant OMB Parties. That necessarily involved an investigation of that relationship. It was inevitable that there would be overlapping factual issues. In my opinion, the Bank should pay the OMB Parties' costs of the transferred proceedings, including the costs of the proceedings before the Court of Appeal, to the extent that those costs have not been dealt with by orders of the Federal Court.

The Bank's claim for indemnity costs

  1. As I have said, the Bank puts its claim for indemnity costs solely on the basis of agreements between it and the OMB Parties. Originally, the Bank relied on a large number of provisions in the OMB Documents. However, in oral submissions, it confined itself to provisions in the guarantees given by individual OMB Parties of the franchisee's obligations under the relevant OMB Agency Agreement and other OMB Documents and in the mortgages the Bank took in some cases, but not all, to secure loans that it provided for working capital. The submissions were made by reference to the documents relating to the Rhodes OMB. The parties accepted that the agreements in relation to the other OMBs did not raise materially different issues.

  1. As the Owner Manager of the Rhodes OMB, Ms Geraghty signed a guarantee of Geraghty & Palmer's obligations under the OMB Agency Agreement and related documents at the same time as the other OMB Documents relating to the Rhodes OMB were signed. That guarantee, which was dated 21 December 2005, provided the following in Part 2(b):

You guarantee to pay us damages for any breach of the secured obligations by the agent, including our costs of enforcing the obligations of the agent under the relevant documents.

The "agent" is a reference to Geraghty & Palmer, the franchisee. "Secured obligations", "obligations" and "relevant documents" are all defined broadly to include the OMB Agency Agreement and the obligations owed under it and any associated agreement by which the Bank lent money to the franchisee.

  1. Part 3 of the guarantee provides:

If we suffer any loss because the agent does not fully and punctually perform the secured obligations, or does not pay damages on the due date we require for payment of the damages from the agent for whatever reason including, without limitation, because of any disability or incapacity of the agent or because any agreement between us and the agent is void or unenforceable, you will pay us the amount of that loss, as principal debtor.

  1. Part 19(a) relevantly provides:

You must pay all costs and expenses of whatever nature incurred by us and any attorney in connection with:
...
(iii) any attempt by us or any attorney to enforce this guarantee or any other security in connection with the secured obligations (whether successful or not);
(iv) any dispute or litigation we become involved in because of this guarantee; ...

  1. Ms Geraghty and Mr Palmer signed additional guarantees on 15 February 2007. Those guarantees are worded somewhat differently to the original guarantee signed by Ms Geraghty. But it is not suggested that those differences raise different issues.

  1. At about the time Ms Geraghty and Mr Palmer provided guarantees, they also executed a mortgage over their home. Clause 19.1 of that mortgage provided:

When we ask, you must pay us any costs we reasonably incur in enforcing this mortgage after you are in default (including in preserving and maintaining the property such as by paying insurance, rates and taxes for the property and our costs). This applies to expenses we incur before or after taking action under clause 23.

Clause 23 sets out the steps that the Bank may take to enforce the mortgage. "Costs" is defined in cl 1 in the following terms:

costs includes charges and expenses. It also includes costs, charges and expenses in connection with advisers (in the case of legal advisers, on a full indemnity basis or solicitor and own client basis, whichever is higher).

  1. The Bank submits that the costs of defending the proceeding brought by the Geraghty & Palmer Parties were "costs and expenses of whatever nature incurred by us and any attorney in connection with any attempt by us or any attorney to enforce this guarantee or any other security in connection with the secured obligations (whether successful or not)" or, alternatively, were costs incurred in connection with "any dispute or litigation we become involved in because of this guarantee" and, consequently, were costs recoverable under the guarantee from Ms Geraghty on an indemnity basis. It makes similar submissions in relation to the second guarantee given by Ms Geraghty and the guarantee given by Mr Palmer. In the case of the mortgage, it submits that the costs of defending the proceeding were costs incurred in enforcing the mortgage.

  1. I do not accept the Bank's submissions. The Geraghty & Palmer Parties made a large number of claims in the proceeding they brought. They sought damages as well as orders setting aside all the agreements embodied in the OMB Documents, including the guarantees and mortgage. The proceeding would have been brought whether or not the Bank sought to enforce the guarantees and mortgage. Given that, I do not accept that the Bank's costs of defending the proceeding can be treated as costs incurred in connection with the mortgage or guarantees. The Bank incurred some costs in the proceeding in enforcing the guarantees and mortgage. However, it is difficult to separate out those costs from the costs of defending the claim as a whole. The costs that are solely attributable to the guarantees and mortgage are likely to be very small in the context of the whole case. For those reasons, I can see no point in trying to separate out those costs from the Bank's other costs in the case. It follows that there should be no order for indemnity costs in favour of the Bank in the Geraghty & Palmer proceeding or in any of the other proceedings.

The OMB Parties' application for a stay

  1. The principles which the court will apply in considering whether to grant a stay were stated in these terms by Kirby P, Hope and McHugh JJA in Alexander v Cambridge Credit Corporation Ltd(Receivers Appointed) (1985) 2 NSWLR 685 at 694-5:

... In our opinion it is not necessary for the grant of a stay that special or exceptional circumstances should be made out. It is sufficient that the applicant ... demonstrates a reason or an appropriate case to warrant the exercise of discretion in his favour ... The Court has a discretion whether or not to grant the stay and, if so, as to the terms that would be fair. In the exercise of its discretion, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties ... Two further principles can be mentioned. The first is that where there is a risk that the appeal will prove abortive if the appellant succeeds and a stay is not granted, courts will normally exercise their discretion in favour of granting a stay ... where it is apparent that unless a stay is granted an appeal will be rendered nugatory, this will be a substantial factor in favour of the grant of a stay.

That statement has been applied in numerous subsequent cases - most notably by the Court of Appeal in Kalifair Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 at 741; and New South Wales Bar Association v Stevens [2003] NSWCA 95 at [87]ff per Spigelman CJ (with whom Meagher and Sheller JJA agreed).

  1. In these proceedings, the OMB Parties rely in particular on Kalifair. In that case, the Court of Appeal granted a stay where three out of the four appellants had no assets. In doing so, the Court pointed out that, unless a stay were granted, the appellants would be wound up and the appeal itself could be stayed. The directors would lose control of the litigation and the creditors, including the judgment creditor, would have a say in any decision to proceed. On the other hand, as the Court pointed out, the judgment creditor would not suffer any relevant prejudice, since it would recover nothing in the winding up in any event.

  1. However, the position was different in relation to the fourth appellant, which had assets of $1.7 million. As the Court pointed out, at [28]:

A successful party is prima facie entitled to the fruits of his judgment. He is entitled to be protected, as far as practicable, from the risk that if the appeal fails assets which earlier were available to satisfy the judgment will not longer be available for that purpose. The Court will endeavour to see that a stay does not cause that kind of prejudice to a judgment creditor. An appellant may be required to provide appropriate security as the price of a stay which may make the judgment creditor a secured creditor. Otherwise a requirement for security is only intended to protect the status quo, that is the existing value of the judgment and not to improve the position of the judgment creditor by increasing that value.

  1. Applying these principles, the Court in Kalifair accepted an undertaking from the fourth appellant that it would not deal with its assets except in the ordinary course of business, including the payment of legal expenses to prosecute the appeal. It seems clear from the judgment that the Court would have insisted on that undertaking as a condition of granting a stay.

  1. The OMB Parties' application for a stay in this case was far from satisfactory. The basis on which the application was put was that they wanted a stay for a short period of time in order to consider whether to pursue an appeal and, if that is what they decided to do, to make an application to the Court of Appeal for a continuation of the stay.

  1. The OMB Parties filed no evidence in support of a stay. They submitted that it was common for a court at first instance to grant a short stay to give an unsuccessful party an opportunity to consider whether to appeal and for evidence to be filed later if the appeal was lodged and an extension of the stay was subsequently sought from the Court of Appeal. Here, they submitted that it was appropriate that a stay be granted for three months, or such other time as the Court thought was appropriate, to enable them to consider an appeal, formulate grounds of appeal and make an application for an extension of any stay. They accepted that, in the meantime, it was appropriate that they should give a "Mareva undertaking" - that is, an undertaking that they would not dispose of their assets except in the ordinary course of business - but only if the Bank gave a cross-undertaking as to damages.

  1. In many cases, a judge at first instance may, on delivering judgment or shortly after delivering judgment, grant a short stay in order to give an unsuccessful party an opportunity to consider the judgment and the question of an appeal. That will be done where, if the judgment takes effect immediately, the underlying subject matter of the dispute is likely to be destroyed: see GIO General Ltd v Passau [2013] NSWSC 682 at [11] per Harrison J citing Paringa Mining and Exploration Co Plc v North Flinders Mines Ltd (No 2) [1988] HCA 53; (1988) 165 CLR 452 and Kalifair Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737. Similarly, a judge at first instance may be prepared to continue relief on an interlocutory basis where the effect of the judgment is to refuse that relief and, absent the relief, the parties' positions cannot be restored in the event of a successful appeal: see Kalifair at [18]; see also Stirling Harbour Services Pty Ltd v Bunbury Port Authority (No 2) [2000] FCA 87 at [13] per French J. The stay or relief may be granted on terms: see, eg, Andrews v John Fairfax & Sons Ltd [1979] 2 NSWLR 184; Alexander v Cambridge Credit Corporation Ltd(Receivers Appointed) (1985) 2 NSWLR 685. In both types of case, the purpose of the relevant order is to ensure that any rights of appeal are not rendered nugatory: Wilson v Church (No 2) (1879) 12 Ch D 454 at 458 per Cotton LJ; Alexander v Cambridge Credit Corporation Ltd at 695. In those types of case, it will often be unnecessary for the party seeking the stay or interlocutory relief to file any evidence since it will be obvious from the nature of the dispute and the terms of the judgment that, unless the relief is granted immediately, any rights of appeal will be rendered worthless.

  1. In the present case, however, the principal judgment in this matter was delivered over three months ago. No orders were made at that time. The only orders that will be made are orders for the payment of money and, in the case of some proceedings, orders for the possession of property as a means of enforcing judgments for a monetary sum. It might have been expected, in those circumstances, that the OMB Parties would provide the Court with at least some evidence of their current financial position so that the Court was in a position to reach a proper conclusion on the likely effect if judgments for monetary amounts were not stayed. Instead, the OMB Parties appeared to have proceeded on two assumptions. The first is that, having regard to the nature of the stay they seek, it was unnecessary for them to file any evidence. The second is that it was obvious from the material already before the Court that the OMB Parties could not afford the judgments against them so that action would be taken by the Bank to enforce the judgments that it obtained, with the result presumably that the franchisees would be placed into liquidation and the individual OMB Parties would be made bankrupt and would lose their family homes. However, the first assumption reverses the burden of proof; and it overlooks the fact that the OMB Parties have already had over three months to consider whether to appeal and to formulate grounds of appeal. The second may be true of some OMB Parties, but it is not clear that it is true of all. For example, the judgment against the Rossmick No 1 Parties is for an amount of approximately $96,000. It might be inferred from the evidence that Rossmick No 1 itself has no assets to meet that judgment. However, it is not at all clear that Mr Chapman, one of the guarantors, could not do so; and it is possible that other OMB Parties may be in a similar position. Absent evidence, the Court has no means of knowing whether that is the case or not.

  1. Having regard to the conclusions I have reached, it will be necessary to amend the proposed short minutes of order which have been prepared by the Bank and are now largely agreed. At the same time, it would be desirable to adjust the judgment for interest so that interest is calculated up until the day on which judgment is pronounced.

  1. Bearing those matters in mind, I propose to direct the Bank to serve on the OMB Parties and provide to my Associate amended proposed short minutes of order by 4.00 pm on 13 June 2014. I will list the matter before me for the purpose of delivering judgment at 9.30 am on 20 June 2014. Any judgment for interest should be for interest up until that date. The matter can be removed from the list if the OMB Parties notify my Associate before 4.00 pm on 19 June 2014 that the orders proposed by the Bank give effect to my judgments, in which event I will make the orders in chambers. I propose to stay any order for possession until 11 July 2014. It seems to me that a short stay of those orders is warranted to give the relevant OMB Parties an opportunity to prepare evidence in support of a longer stay. If the stay is not granted, there is a risk that the relevant OMB Parties will lose possession of their properties, which in most cases are their family homes. A short stay is unlikely to have any material adverse effect on the Bank.

  1. The effect of these directions is that the Bank will be entitled to enforce judgments for monetary amounts immediately after judgment for those amounts is given. However, that entitlement is not likely to have any immediate practical consequences for the OMB Parties and will certainly not render any appeal nugatory. The OMB Parties will have five weeks from the time this judgment is delivered to apply to the Court of Appeal for any further stay in respect of the orders for possession and to apply for a stay of the monetary judgments. In all, the OMB Parties will have had five months since I delivered my principal judgment in which to consider whether to appeal and to formulate their grounds of appeal. In all the circumstances, that seems to me to be reasonable.

Directions

  1. The directions of the Court are:

(1)   the Bank serve on the OMB Parties and provide to my Associate amended proposed short minutes of order that give effect to this judgment by 4.00 pm on 13 June 2014;

(2)   the matter be stood over before me at 9.30 am on 20 June 2014;

(3)   liberty to the parties to remove the matter from the list if the OMB Parties notify my Associate before 4.00 pm on 19 June 2014 that the orders proposed by the Bank give effect to this judgment and the judgment I delivered on 13 February 2014.

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Decision last updated: 12 June 2014

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