Uren v Uren
[2017] VSCA 300
•19 October 2017
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2017 0104
| BRUCE NORMAN UREN | Applicant |
| v | |
| NOEL MURRAY UREN | Respondent |
---
| JUDGES: | SANTAMARIA and ASHLEY JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 19 October 2017 |
| DATE OF JUDGMENT: | 19 October 2017 |
| MEDIUM NEUTRAL CITATION: | [2017] VSCA 300 |
| JUDGMENT APPEALED FROM: | [2017] VSC 265 (Judd J) |
---
PRACTICE AND PROCEDURE – Application for stay of execution of orders pending application for leave to appeal – Where orders relate to division of proceeds of sale of farm operated as partnership – Whether prospect that appeal may be rendered nugatory – Where applicant alleged that respondent impecunious and real risk of proceeds of judgment being dissipated partly by gambling – Application dismissed.
---
| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr J P Moore QC | HWL Ebsworth |
| For the Respondent | Mr C J Tran | DST Legal |
SANTAMARIA JA
ASHLEY JA:
Introduction
On 4 September 2017, a judge in the Trial Division made orders that funds presently in court be paid in certain proportions to the applicant, Bruce Uren, and the respondent, Noel Uren. On 14 September 2017, the trial judge made orders as to costs. On 26 September 2017, Bruce Uren applied for leave to appeal the orders made on 4 September 2017 and 14 September 2017. He also applied for a stay of execution of certain parts of those orders pending the hearing and determination of the application for leave to appeal.
On 19 October 2017, this Court made orders that the application for a stay be dismissed and that the applicant pay the costs of the respondent, such costs to be taxed on a standard basis. At the time of making those orders, we indicated that we would provide reasons in due course. These are our reasons.
The dispute between Bruce and Noel Uren
Bruce and Noel Uren are brothers. Bruce, now aged 72, is a financer broker. Noel, now aged 68, is a farmer.
Since 1974, Bruce and Noel had been the registered proprietors of farming land at Walkerville, Victoria (‘Walkerville’) as tenants in common in equal shares. Walkerville comprised four lots.[1] Bruce and Noel operated Walkerville as a partnership between themselves. However, each of them disputed the terms of the partnership: Noel claimed an entitlement to wages, as a partnership expense, commencing in 1974 when the brothers became tenants in common. He also claimed interest on capital.
[1]Each lot was mortgaged to RMBL Investments Pty Ltd and Elders Rural Bank Ltd.
Over time, the partnership continued to make losses. From about 2013, the partnership broke down. Bruce and Noel agreed between themselves that the partnership would need to be dissolved, its assets sold and the proceeds used in the manner prescribed by the Partnership Act 1958 (Vic).
In June 2015, Bruce sought a declaration that the partnership was dissolved and orders for the sale of partnership assets, the application of proceeds of sale and the adjustment of entitlements. In September 2015, Noel issued a proceeding against Bruce, Exclusive Finance & Leasing Pty Ltd (‘EFL’), which was a company controlled by Bruce, and RMBL Investments Pty Ltd (‘RMBL’), a financier and mortgagee of the farm, claiming compensation for alleged wrongdoing on the part of Bruce in his management of partnership affairs. The latter proceeding was discontinued on 18 September 2016.
By August 2015, Bruce and Noel had reached agreement on the dissolution of the partnership and for the sale of partnership assets. Settlement of the sale took place in March 2016, and the net proceeds of approximately $978,443.04 were paid into court and are currently held by the Senior Master of this Court.
The brothers appointed Mr Russell Munday, an accountant, to investigate and prepare a report on the respective entitlements of Bruce and Noel under the partnership. Mr Munday prepared a draft report dated 29 March 2016 and, following further submissions from the parties, prepared a final report dated 18 August 2016. In part, Mr Munday was directed to inquire into dealings and transactions of the brothers in respect of the partnership business from 1 July 1991.
The Munday report was, for the most part, adopted by the parties at trial, with only three issues remaining for adjudication by the trial judge. The parties filed points of claim and defence to identify the remaining issues between them. In the event, the three issues for determination at trial were framed as follows:
(a) Is Noel entitled to an adjustment in his favour, calculated by reference to unpaid wages as if a partnership expense, and if so, in what amount, and for what period?
(b) Is Noel entitled to an adjustment in his favour for interest calculated on capital advanced by him to the partnership and, if so, how much?
(c) Is Bruce entitled to an adjustment in his favour to reflect the amount of a deduction made by RMBL of $39,467.50 for its costs, made at settlement of the sale of Walkerville?[2]
[2]Uren v Uren [2017] VSC 265 [5] (‘Reasons’).
At trial, Bruce also amended his points of defence to allege that, if the partnership agreement contained a term pursuant to which Noel was entitled to remuneration, Noel was precluded from recovering wages earned prior to 11 November 2010 by reason of s 5(1) of the Limitations of Actions Act 1958.
In his report, Mr Munday concluded that the capital account balance for Bruce was $1,058,636 and for Noel $679,035. Following further adjustments made for the financial year ending 30 June 2016, the capital account balance for Bruce was $809,968, plus an allowance for interest earned by his company, EFL, charged to the partnership under an agreement dated 30 June 1999. The amount of the interest payable to EFL from 1999 brought the total entitlement of Bruce (and EFL) to $1,063,395. Following adjustments made in respect of Noel’s capital account balance to 30 June 2016, Mr Munday assessed his balance at $291,624.[3]
[3]Ibid [7].
Mr Munday also identified the following two items for further consideration:[4]
(d) whether Noel was entitled to unpaid wages from the partnership; and
(e) whether Noel was entitled to interest paid on capital.[5]
[4]It is to be observed that these items comprised two of the three issues for determination at trial. See [9] above.
[5]Reasons [8].
In the event, the trial proceeded on the basis that, should Noel fail in his claim for wages and interest (issues 1 and 2), and Bruce fail in his claim for the RMBL costs (issue 3), the apportionment made by Mr Munday would stand.
On 25 May 2017, the trial judge delivered reasons for judgment and made directions with respect to the preparation of final orders and costs.
Factual background
In his reasons, the trial judge set out the historical background to the ownership of Walkerville and another property comprising about 230 acres in Krowera, Victoria (‘Krowera’), on which children of the Uren family, including Bruce and Noel, had grown up. That background may be summarised as follows.
Noel was the youngest of four children. He had a sister, Ruth, and two brothers, John and Bruce. Krowera had been farmed by Noel’s father, Norman, and Norman’s brother, John (known as Jack) under the trading name ‘Uren Brothers’. Norman and Jack each owned half of Krowera. They also owned Walkerville, which comprised about 570 acres.
In 1961, Norman died. His wife, Ethelwyn, succeeded him as owner of his half interest in Krowera and Walkerville. Following his father’s death, Noel, then aged 13 or 14, left school to help his mother and his uncle Jack run the farm at Krowera. He was not paid a wage, but was provided accommodation, meals and some cash. Bruce remained at school.
In 1963, John died. At around the same time, Ethelwyn and Jack transferred ownership of the Walkerville property to Noel, Ruth and Bruce. Walkerville was still a bush block and did not support any livestock at the time.
In 1973, Ruth died. Her interest in the Walkerville property passed equally to Noel and Bruce.
In 1974, Jack died. He left his interest in Krowera to Noel. Following Jack’s death, Noel held a half interest in Krowera with his mother, and a half interest in Walkerville with Bruce. Noel continued to operate the Krowera property in partnership with his mother, trading under the name ‘Uren Brothers’, until her death in October 1991.
From 1968, Ethelwyn ceased being actively involved in the partnership business. In that year, Noel and his mother sold part of Krowera (85 acres) for which they received about $220,000. With his half share, Noel invested in a property at Inverloch and continued to farm the remaining 140 acres at Krowera. Noel later sold the Inverloch property and contributed the funds to the Walkerville partnership.
In 1991, Ethelwyn died. Bruce and Noel each acquired one half of her interest in Krowera. Thus, Noel owned three quarters, and Bruce one quarter.
In 1993, Krowera was sold and the net proceeds contributed to the Walkerville partnership.
Until his mother’s death, Bruce had no interest in the Krowera property. He completed his schooling. He then worked for a bank and trained as an accountant.
Reasons of the trial judge
The reasons of the trial judge delivered on 25 May 2017 may be summarised as follows.
Relevant findings of fact
The trial judge rejected a contention advanced by Bruce that, as a partner in Uren Brothers, operating the Krowera farm until its sale, Noel had derived a substantial benefit which militated against his claim for an implied agreement that he be paid wages out of the Walkerville partnership.[6] The trial judge noted that there was no evidence of what profits, if any, were derived from the Uren Brothers partnership.[7] Noel said that he received accommodation, food and some cash, but he did not receive a wage.[8]
[6]Ibid [21].
[7]Ibid.
[8]Ibid.
The trial judge found that, while provided with accommodation at Walkerville after 1994, following the sale of Krowera in 1993, Noel did not draw the equivalent of a wage or anything approaching a wage. The trial judge was satisfied that Noel lived frugally as a farmer, with no family to support, drawing only what was necessary for his basic living expenses.[9] Moreover, it is not clear what, if any, income Noel had derived between 1974 and 1993.[10]
[9]Ibid [24].
[10]Ibid [26].
The trial judge also found that, for many years, the partnership had been employed by Bruce as a convenient tax minimisation vehicle for his personal benefit. The trial judge said that the partnership accounts were fabricated, at the direction of Bruce, to record wages which were never paid to Noel.[11] He said that Bruce’s contribution to the partnership in the form of ‘looking after the paperwork’ was done so in a manner that was self-interested and, in some instances, detrimental to Noel’s interests.[12]
[11]Ibid [27].
[12]Ibid [29].
The trial judge accepted that Bruce did some work on the Walkerville property from time to time; ‘at best it was occasional’.[13] He found that Noel carried out the substantive work with the assistance of contractors and that, until 1993, Noel had also operated the Krowera farm.[14]
[13]Ibid [31].
[14]Ibid.
Remuneration
In respect of the issue of remuneration, the trial judge set out a number of findings made in Mr Munday’s report. He noted that the parties had not agreed on the appropriate wage in the event that the remuneration term was to be implied into the partnership agreement.[15] Having been provided with the Pastoral Award 2010, which was tendered into evidence, the trial judge said that he was ‘left with a rather crude mechanism for the assessment of the value of any entitlement to wages’. [16] He found that no deduction should be made for the value of accommodation.[17] He also found that, while it is true that Bruce made a minor contribution, he did not regard this contribution as comparable with, or in any way equivalent to, the full-time contribution of labour made by Noel after 1993.[18]
[15]Ibid [35].
[16]Ibid.
[17]Ibid.
[18]Ibid [43]. The trial judge continued: ‘There are also other important contextual factors, such as differing capital contributions, the sources of funds for capital contributions, and the willingness of Bruce to introduce EFL as a financier and beneficiary of tax contrivances. Bruce always assumed that Noel was the farmer and would undertake the farming activity. There was no suggestion that Bruce would ever assume such responsibility’.
The trial judge said that the partnership between Bruce and Noel was unconventional: Noel depended upon Bruce for his material needs, and Bruce assumed the responsibility of providing for Noel’s needs.[19] The arrangements between the brothers was informal. It was a familial relationship. Their business relationship arose out of inheritances, finding expression in the common ownership of Walkerville.[20] In the event, the trial judge concluded that the terms of the business relationship between the brothers were such that the brothers agreed that, by 1993, provision would be made for Noel’s remuneration as an expense to the partnership.[21] Such a term, said the trial judge, was necessary for the reasonable operation of the partnership, and, by assuming responsibility for Noel and recognising Noel’s dependence upon him for material needs and future security, Bruce made fairness a consideration that was necessary for the reasonable operation of the partnership.[22]
[19]Ibid [44]–[45].
[20]Ibid [49].
[21]Ibid [64].
[22]Ibid [65].
Interest
It appears that Noel’s claim for interest was based upon the following alleged conversation with Bruce in about 1988:
In about 1988, my mum was living in a nursing home at Korumburra and she and I were thinking of selling part of Krowera. Bruce approached me with an idea. He suggested that with my share of the sale proceeds, he and I should buy the property next door to Walkerville called King’s Park owned by Brian Henry, and we should farm it. I said that it was unfair if I was putting in more money than he was. He said not to worry, that all money contributed to the partnership carried interest just like all our existing loans at the time, and that he would get an accountant to square it all up at the end.
In the end, Bruce and I did not buy the King's Park property. Instead, in about 1988, my mum and I sold about 85 acres of Krowera. We got about $220,000 for the land. I put my half-share of the proceeds into buying a property at 13 Towns End Bluff Road, Inverloch. I continued to farm the remaining 140 acres at Krowera, plus 700 acres at Walkerville including the 125 acres at King's Flat Road. I continued to take living money out of the joint bank account.
In September 1991, I sold my Inverloch property for $160,000. I put all of the money from the sale into the joint bank account with Bruce which would have been about $150,000 net. I did that because of what Bruce had said earlier, about contributions carrying interest.
In October 1991, my mum died. In her will, she left her property, being half of Krowera, to me and Bruce in equal shares. That meant that I owned three quarters of Krowera, and Bruce owned one quarter. In June 1993, Bruce and I sold Krowera for $280,000. The proceeds were put into the joint bank account. Again, I assumed my 75% share of the money was carrying interest.[23]
[23]Ibid [68].
The trial judge did not accept that Noel’s evidence went as far as to establish an oral agreement with Bruce that all contributions of capital would carry interest; however, it was evidence of an occasion on which the topic arose and some agreement was reached in advance of a transaction that did not eventuate.[24] The trial judge held that an appropriate and fair rate of interest was to be the rate applied by the Australian Taxation Office as the ‘agreed’ rate under a 1999 Division 7A agreement between EFL, Bruce and Noel and that any due and unpaid interest should be compounded at least annually.[25]
[24]Ibid [71]. The trial judge said that the significance of the conversation was emphasised by a 1999 Division 7A agreement, which suggested a willingness to acknowledge that interest is payable on capital contributions. Another contextual factor, said the judge, was ‘[t]he inequity in the brothers’ relationship, reflected in Noel’s dependency on Bruce, and Bruce’s acknowledgement of Noel’s dependency, with the corresponding duty of support’: at [72].
[25]Reasons [74].
RMBL costs
At trial, the parties agreed that RMBL had wrongfully deducted the sum of $39,467.50 from the proceeds of sale of the Walkerville property. They also agreed that Noel was ultimately responsible to meet his obligation under a costs order made against him for discontinuing the proceeding that he had issued in September 2015.[26] All that was necessary for the trial judge to decide was whether the wrongful deduction of the amount should translate into an adjustment for that sum in favour of Bruce, to the detriment of Noel. The trial judge held that it should. He concluded:
Submissions on this issue were not elaborate. It is not as if Noel permitted the amount to be deducted at settlement, or otherwise conducted himself in such a way as to act to the prejudice of Bruce. Noel objected to the deduction and proceeded to settlement under protest. He had little option but to take that course. But in the end, Noel is liable for the costs, whatever they may be. He could have asserted a right to have the funds restored, or for taxation. Noel had the ability to take steps to limit his liability. In these circumstances it would seem unjust to penalise Bruce for Noel’s inactivity. Noel must suffer the adjustment sought by Bruce.[27]
[26]See [6] above.
[27]Reasons [79].
Limitation period
At trial, Bruce submitted that s 5(1) of the Limitation of Actions Act 1958 applied to Noel’s claim for remuneration because it was founded on simple contract and that the claim fell outside the scope of the order for an account of partnership debts and liabilities as at 30 June 2015, following the dissolution of the partnership. Such a provision would have barred any claim prior to 10 November 2010, being six years prior to the day on which Noel filed his points of claim in which he first expressed the basis for his remuneration claim. Noel submitted that Bruce had misconceived the nature of the proceeding and that s 5(1) had no application.
In the event, the trial judge held that, having expressly agreed to the scope of the inquiry, there was no occasion for one or other of the partners to complain that the dealing, transaction or corresponding liability arose earlier than six years prior to the commencement of the proceeding or Noel’s points of claim.[28] He added that, by their agreement, the brothers may be taken to have expressly waived any right to limit the scope of the inquiry, including by raising a defence under the Limitation of Actions Act 1958.
[28]Ibid [91].
Orders
On 4 September 2017, the trial judge made the following orders:
1.Judgment for the Defendant on his claims made by Points of Claim dated 11 November 2016.
2.Judgment for the Plaintiff on the counterclaim set out in paragraphs 13 to 15 of his Points of Defence and Counterclaim dated 9 December 2016 (RMBL Counterclaim).
3.The Plaintiff’s Points of Defence and Counterclaim dated 9 December 2016 are otherwise dismissed.
4.The Plaintiff’s Counterclaim (originally in proceeding S CI 2015 04786) set out in paragraphs 29 to 34 of his Defence and Counterclaim dated 16 October 2015 is dismissed.
5.The Court adopts the addendum to the Munday report dated 29 June 2017.
6.The Court declares that in respect of the sum of $980,649.89 presently in court, the parties are entitled to the following shares:
(a) The Plaintiff: $81,701.95; and
(b) The Defendant: $898,947.95.
7.From the date of this order, the Senior Master cause the Plaintiff’s share to be accounted for separately to the Defendant’s share.
8.From the balance standing to the credit of each party, the Senior Master cause $50,000 to be paid forthwith to that party.
9.After the payments provided for in order 8, the Senior Master cause the balance of the moneys standing to the credit of each party, less the sum of $25,000, to be paid forthwith to that party.
10. The operation of order 9 is stayed for 30 days.
11.The parties have liberty to apply for a further order or direction in relation to the application of the sum of $50,000 held in Court for the payment of costs.
12. Costs reserved.
On 14 September 2017, the trial judge made the following orders:
1. Paragraph 6 of the orders made on 4 September 2017 is vacated.
2.The Court declares that in respect of the sum of $978,443.04 presently in court, the parties are entitled to the following shares:
(a) The Plaintiff: $80,598.52; and
(b) The Defendant: $897,844.52.
3. The Defendant pay the Plaintiff’s costs of the RMBL Counterclaim.
4.The Plaintiff otherwise pay the Defendant’s costs of the consolidated proceedings on a standard basis.
5. The Plaintiff pay the Defendant’s costs of the costs application.
Application for leave to appeal
On 26 September 2017, the applicant applied for leave to appeal the orders made on 4 September 2017 and 14 September 2017.
In his application for leave to appeal, the applicant identifies 16 grounds of appeal arising out of the reasons published on 25 May 2017, which led to the orders that are impugned. He seeks orders including the following:
1.The Orders made 4 September 2017, save for paragraphs 2 and 8, be set aside and in place thereof:
(a)The Respondent's claims made by Points of Claim dated 11 November 2016 be dismissed;
(b)In accordance with the findings at paragraph 23.8 of the Russell Munday report dated 18 August 2016, after adjustment, the capital account balances as at 30 June 2016 are as follows:
(i)The Applicant $809,968 plus loan owed to Exclusive Finance & Leasing Pty Ltd (EFL) as at 30 June 2015 of $180,442, plus EFL loan created after 1 July 2015 $72,985 for a total owed to the Applicant in the sum of $1,063,395; and
(ii) The Respondent, the sum of $291,624.
(c)In the alternative to paragraph 1(b), that the balance amount of the funds presently held in court, be distributed to the Applicant and the Respondent in equal shares.
(d)From the date of this order, the Senior Master cause the Applicant's share to be accounted for separately to the Respondent's share.
2. The Orders made 14 September 2017 be set aside and in place thereof:
(a)The Respondent pay the Applicant’s costs of the RMBL Counterclaim;
(b)The Respondent pay the Applicant’s costs of the consolidated proceedings on a standard basis;
(c) There be no order as to costs on the costs application.
3. The Respondent pay the Applicant’s costs of this application.
Application for a stay
On 26 September 2017, the applicant applied for an order staying the operation of parts of the orders made on 4 September 2017 and 14 September 2017. Paragraph 1 of his application is in the following terms:
Pursuant to rule 66.16 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) and/or the inherent jurisdiction of the Court, an order that, until final determination of the Applicant’s application for leave to appeal, and any appeal, from the orders made by Justice Judd on 4 September 2017 and 14 September 2017 or until further order:
(a)paragraphs 6 and 9 of the order made by Justice Judd on 4 September 2017 are stayed; and
(b)paragraphs 2, 4 and 5 of the order made by Justice Judd on 14 September 2017 are stayed.
The application for a stay is supported by an affidavit of the applicant sworn on 26 September 2017. In his affidavit, the applicant describes the background to the present proceeding and gives reasons for his application for a stay of execution. In particular, he contends that there is a real risk that, if the orders are not stayed:
(f) Noel Uren will expend the funds that will be disbursed in accordance with paragraph 2 of the orders made on 14 September 2014; and
(g) if he is successful in his application for leave to appeal, it will not be possible for him to recover the judgment from Noel Uren.
In support of his contention that Noel Uren will expend the funds the subject of the orders and thereby deprive him of the fruits of his appeal, the applicant has deposed to documentation provided by those representing Noel Uren to the effect that Noel Uren has no assets, generates very little income and is otherwise impecunious. He has also deposed that he has ‘a real apprehension’ that, if Noel Uren receives his share of funds in accordance with the orders, ‘he will expend the money on gambling’. He said that he bases his apprehension upon his knowledge that Noel Uren gambles on a regular basis and that there have been regular drawings ‘from the partnership bank accounts of rounded sums’ and from Noel Uren’s personal accounts at venues each of which he believes has gambling facilities.
Material filed in opposition to application for a stay
On 10 October 2017, Noel Uren filed a notice of opposition to the application for a stay. Two affidavits, both sworn on 10 October 2017, have been filed on his behalf. The first is an affidavit of Dominica Sophia Tannock, the solicitor for Noel Uren. The second is an affidavit of Noel Uren himself.
In her affidavit, Ms Tannock said that, based on her review of the transcript of the trial, at no stage of the trial did Bruce allege that Noel regularly gambled. She also said that Bruce did not raise any of the gambling allegations with Mr Munday, and it was not put to Noel that he withdrew funds from the partnership account for gambling purposes. Ms Tannock also described the only previous reference to gambling, being in a letter dated 6 September 2016 from the applicant’s former solicitors.
In his affidavit, Noel Uren deposed that, of the $50,000 paid to him pursuant to paragraph 8 of the orders made on 4 September 2017, he has expended $16,000 on a boat and $11,000 in satisfaction of his debts. He said that, other than the boat, an old car and approximately $23,000 in his bank account, he has no other assets. He also said that he has no regular income and pays monthly rent of $240. In relation to his liabilities and expenses, he has deposed that he has incurred and paid approximately $365,000 on legal and accounting fees in the proceeding and has outstanding and anticipated liabilities of approximately $23,500. He has estimated that he requires approximately $600 per week for living expenses, which he meets from the funds paid to him out of court. Noel Uren has also denied the applicant’s allegations of gambling and that he would spend the judgment sum on gambling; he said that he has not gambled on a regular basis for 15 years and that, nowadays, he ‘might put a few dollars in a poker machine on the rare occasion’. He also said that he attends the venues with gambling facilities for lunch and dinner. He has deposed that he does not remember the specific drawings from the partnership account; the only reason for drawing rounded sums was to pay living expenses, and ATMs at social venues were used because of their convenient location.
Principles governing the grant of a stay
The principles governing the grant of a stay are undisputed.
Order 64 of the Supreme Court (General Civil Procedure) Rules 2015 is entitled ‘Appeals and applications to the Court of Appeal’.[29] Rule 64.39 provides:
Except so far as the Court of Appeal otherwise orders—
(a)an application for leave to appeal or appeal shall not operate as a stay of execution or of proceedings under the decision appealed from; and
(b) no intermediate act or step shall be invalidated.
[29]In the present application, the applicant has sought a stay pursuant to rule 66.16, which simply provides: ‘The Court may stay execution of a judgment.’
In deciding whether to order a stay of execution, the Court has a wide discretion and should take into account all the circumstances of the case.[30] The applicant bears the onus of demonstrating that a stay is justified.[31]
[30]Maher v Commonwealth Bank of Australia [2008] VSCA 122 [23] (Dodds-Streeton JA, with whom Redlich JA agreed) (‘Maher’).
[31]Alexander v Cambridge Credit Corporation Ltd [1985] 2 NSWLR 685, 694 (Kirby P, Hope and McHugh JJA); Maher [2008] VSCA 122 [20]; Loftus v Australia and New Zealand Banking Group Limited [2016] VSCA 114 [7]–[8] (Whelan and Kaye JJA) (‘Loftus’).
The power to order a stay will generally not be made unless the applicant demonstrates special or exceptional circumstances.[32] Such circumstances include where there is a real risk that it will not be possible to restore the applicant substantially to its former position if the judgment against the applicant is executed before the conclusion of the appeal.[33] However, the prospect that the appeal may be rendered nugatory must be balanced against the principle that the successful party is entitled to the fruits of its judgment.[34]
[32]Cellante v G Kallis Industries Pty Ltd [1991] 2 VR 653, 656 (Young CJ) (‘Cellante’); Sandri v O’Driscoll [2013] VSCA 281 [39] (Santamaria JA, with whom Tate JA agreed); Bisognin v Hera Project Pty Ltd [2017] VSCA 195 [43] (Tate and Kyrou JJA). See also He v Huang [2017] VSCA 102 [49]–[51].
[33]Loftus [2016] VSCA 114 [7] (Whelan and Kaye JJA), citing Cellante [1991] 2 VR 653, 655; Maher [2008] VSCA 122 [19]–[27]; Cross Country Realty Victoria Pty Ltd v Ubertas 350 William Street Pty Ltd [2015] VSCA 347 [79]–[90] (Kyrou and McLeish JJA); Scarborough v Lew’s Junction Stores Pty Ltd [1963] VR 129, 130 (Adam J).
[34]Maher [2008] VSCA 122 [27].
In order to justify the grant of a stay, an applicant should also demonstrate that there is at least an arguable ground of appeal.[35] Unless there is no arguable ground of appeal, or the appeal is not bona fide, it will usually be inappropriate for the Court to speculate as to the ultimate prospects of success.[36] The Court will ordinarily focus on matters that are relevant to the enforcement of the judgment, rather than matters that are relevant to its validity or correctness.[37]
[35]Loftus [2016] VSCA 114 [8]; Maher [2008] VSCA 122 [27].
[36]Maher [2008] VSCA 122 [27].
[37]Loftus [2016] VSCA 114 [8].
Oral contentions
The applicant contended that, not only was the application for leave to appeal not wholly unarguable, but it enjoyed reasonable prospects of success. First, he said that the holding by the trial judge that there had been a variation of the partnership agreement in 1993 had not been the subject of any contention at the hearing. Secondly, the applicant said that the question of the waiver of the limitation period had not been raised during the oral hearing; rather, it was a matter raised by the trial judge himself after the conclusion of the oral hearing. It then became the subject of written submissions. The applicant referred to He v Huang,[38] in which this Court referred to the breadth of the discretion to order a stay. The applicant said that there was a real risk that the proceeds of the judgment would be dissipated, in part, because Noel Uren was impecunious and, in part, because there was evidence of his gambling. The applicant also said that Noel Uren had not identified any particular need that he had of the proceeds held in court beyond $95,000 and that, therefore, an order for a stay would not prejudice him. The applicant said that the matter should be referred to mediation and that mediation would have a better prospect of success if the funds remained in court in the meantime.
[38][2017] VSCA 102 [49].
Analysis
The principal ground upon which the present application has been advanced is the fear that, unless the relevant orders are stayed, the appeal will be rendered nugatory as Noel Uren will have gambled away the moneys payable to him. The applicant has adduced little, if any, evidence in support of that fear. As much as he has done is depose to the fact that Noel Uren has withdrawn amounts at various venues largely located in Gippsland.
It is clear that Noel Uren is a bachelor who has lived frugally for the whole of his adult life and has done so in Gippsland. He has been able to account for the funds which were paid to him on or about 26 September 2017 in accordance with paragraph 8 of the orders made on 4 September 2017. There is no evidence to suggest that he has any significant debts. He has denied the applicant’s allegations that he is a gambler and, in particular, has deposed: ‘I have not gambled on a regular basis for 15 years, as Bruce claims’. Furthermore, he has provided an explanation for the withdrawal by him of amounts at the venues identified by the applicant. He said:
The 12 clubs referred to in Bruce’s affidavit … are the main social venues in the district where I live in South Gippsland (with the exception of the Vine Hotel Richmond). I have lived in rural South Gippsland all my life; there are very few restaurants or cafes or banks in the area. I have lived alone on the Walkerville farm since 1994 and I visit these clubs to have lunch or dinner and to stay in contacts with friends in the area.
These clubs have gambling facilities and ATMs. When I am there, I might put a few dollars in a poker machine on the rare occasion. If I did so, it would not have been much money, as I needed and need the money to live on. I have had little money since Bruce commenced this proceeding over two years ago.
I do not remember the specific withdrawals that Bruce refers to in his affidavit. But the only reason that 1 would have withdrawn rounded sums from the ATMs at these social venues was to pay living expenses (for example, to pay bills). I used these ATMs because of their convenient location.
The applicant tendered evidence of bank statements of the partnership. It is difficult to make anything of the drawings on the partnership account in the period 2009–2010. The applicant also put into evidence bank statements in respect of Noel Uren’s personal account for the period April 2014–April 2016. Those accounts do show drawings at various Gippsland venues. However, over the two-year period, the drawings amount to a little over $11,000 or, approximately, $110 per week. Even if some of those drawings were to support gambling — and multiple withdrawals on a single day on relatively few occasions must provide some sort of evidence of that — the evidence in support of Noel Uren’s alleged gambling would be very weak.
The applicant has failed to persuade us that, unless the orders are stayed, any appeal will be rendered nugatory. Noel Uren has provided a plausible explanation for his withdrawing funds from ATMs at the various venues. We are not persuaded that his style of living will mean that all the funds will be consumed before the application for leave to appeal is heard and determined.
Conclusion
It was for these reasons that we dismissed the application for a stay.
5
6
0