Walker v Lakatoi Universal Pty Limited

[2000] NSWCA 318

NEW SOUTH WALES COURT OF APPEAL

CITATION:         Walker v Lakatoi Universal Pty Limited [2000]  NSWCA 318

FILE NUMBER(S):
40526/00
40527/00

HEARING DATE(S):          30 October 2000

JUDGMENT DATE:           30/10/2000

PARTIES:
Langley Alexander Walker
Walker Consolidated Investments Pty Limited
Lakatoi Universal Pty Limited

JUDGMENT OF: Meagher JA Powell JA Beazley JA   

LOWER COURT JURISDICTION:    Court of Appeal Single Judge

LOWER COURT FILE NUMBER(S):               

LOWER COURT JUDICIAL OFFICER:          Stein JA

COUNSEL:
Mr Walker:                  B McClintockSC/R S Hollo
Walker Consolidated:  R Powell
Lakatoi:  R Ellicott QC

SOLICITORS:
Mr Walker:                Minter Ellison
Walker Consolidated: Perkes & Stone
Lakatoi:  Gye Associates

CATCHWORDS:
review of a stay
whether discretion miscarried
security for judgment debt

LEGISLATION CITED:

DECISION:
Application for review dismissed with costs

JUDGMENT:

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA         40526/00
  CA         40527/00

MEAGHER JA
  POWELL JA
  BEAZLEY JA

Monday, 30 October 2000

Langley Alexander WALKER v LAKATOI UNIVERSAL PTY LIMITED (ACN 000 985 442) & 3 ORS
WALKER CONSOLIDATED INVESTMENTS PTY LIMITED (ACN 002 069 678) v LAKATOI UNIVERSAL PTY LIMITED (ACN 000 985 442) & 3 ORS

JUDGMENT

1. BEAZLEY JA:     This is an application to review the orders of Stein JA made on 1 August 2000 staying the execution of judgment in each of the proceedings subject of the appeals. 

2. To succeed on the application for review it must be demonstrated that his Honour’s discretion miscarried.  It was submitted that his Honour’s discretion in this case miscarried because his Honour failed to take into account a relevant consideration, namely, whether the respondents to the appeal (the applicants for review) would be able to repay the judgment debt should the appellants be successful on the appeal.

3. To determine whether this ground is made out, it is necessary in the first instance to briefly put matters into context.

4. The appellant in each appeal was found to be jointly and severally liable to the respondents in the sum of $12 million for breach of contracts relating to a joint venture for the development of land at Helensburgh.  Before Stein J the respondents conceded that there was an arguable case on the appeals.  The concession was made in circumstances where the length of the trial judge’s judgment was such that it was not feasible for Stein JA to make a determination of that issue on the application for a stay. 

5. There having been a concession that there was an arguable ground of appeal, the issue left for determination by Stein JA was whether, if the judgment monies were paid over, they could be repaid.

6. His Honour did not expressly make any finding in that respect.  Rather he proceeded as follows.  He referred to the concession that there was an arguable case, and noting that he was not in a position to make any real assessment of the strength of the appeals, he stated that he was able to conclude that the appeals were arguable.  Accordingly, the first threshold on a stay application had been met.  His Honour then referred to the matters of basic principle which govern these matters: that that prima facie the Court should respect the judgment of the trial judge and that the respondent was entitled to the judgment pending appeal.  His Honour then said:

   “I then of course need to carry out a balancing exercise as to what should occur.  It seems to me that there should be without much doubt a form of stay granted to the judgment.  What is really in dispute is the extent of the stay.”

7. On the application for review, both appellants took a basically similar position, namely that although it was clear that there was an asset available over which security could be offered in respect of that judgment debt, it was also clear that there was real doubt during the hearing of the stay application about the true value of that security.  For that particular issue to have been resolved, it would have been necessary for there to have been a full valuation hearing, given the significant contest on this issue between the parties.  That, in the normal course is not only inappropriate in an application for a stay, but it was also clear that Stein JA did not have time to deal with the matter on that basis and none of the parties sought that he do so.

8. Although his Honour made no express finding on the point, it is implicit in the passage to which I have referred above that his Honour had some doubt as to the ability of the respondent to repay the judgment if it were not stayed.  Otherwise, there was no basis to grant a stay.  That in effect disposes of the ground advanced to support the application for review.  However, if it was demonstrated that his Honour’s discretion miscarried in some other way, it would still be open for the Court to revisit the matter.  Part of the complaint made by the respondents is the manner in which his Honour ordered that security be given as part of his orders that execution be stayed.  

9. His Honour ordered that the judgment sum was to be secured by payment of approximately half the judgment debt into a holding fund and the balance was to be guaranteed.  Of the monies to be paid into the holding fun, Mr Walker was required to contribute an amount of $2.4 million and the Walker corporate interests were to contribute $3.6 million.  As to the guarantee of the balance, a guarantee provided by another corporate entity in the sum of not quite $6 million to further secure the Walker corporate interest liability.

10. Exception has been taken on behalf of the respondents to the appeal to this division of the provision of security, submitting that under it they may be left significantly unprotected and they contend for alternate orders to be made by this Court on review.  The appellants dispute that the respondents are left unprotected.  In particular, it was submitted on behalf of Mr Walker, and it is not hotly disputed by Walker Investments, that he has some prospects of success which are not available to the corporation.  The respondent/applicant does not agree with that assessment, but in my opinion the contention made on behalf of Mr Walker’s contention bears no particular relevance to this application. 

11. In my view, what has to be recognised is that in making orders for a stay, there is always available to the Court a range of options in balancing the interests of all parties and determining appropriate orders.

12. The broad effect of the orders made here is to provide security for the whole of the judgment debt.  It was not necessary for his Honour to have ordered security at all, let alone in the manner he did.  As I have indicated, there were a huge range of options available, but nothing in my view has been demonstrated that the orders his Honour made were inappropriate, unjust or unfair.  For that reason I am of the opinion that it has not been shown that his Honour’s discretion miscarried.

13. Before proposing the orders in this matter I should make one final comment, and that is in relation to the order that an amount of $500,000 be paid over in respect of costs.  That amount came out of the evidence and submissions before his Honour and as such was also entirely appropriate.

14. In those circumstances I am of the opinion that the application for review should be dismissed with costs.

15. MEAGHER JA:    I am of the same view.  I can detect no error in Stein JA’s judgment.

16. POWELL JA:      I also agree.

17. MEAGHER JA:    The orders of the Court therefore are the orders proposed by Beazley JA.

LAST UPDATED:              10/11/2000