Whitehorse Box Hill Pty Ltd v Alliance CG Pty Ltd

[2022] VSC 61

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL COURT

TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

S ECI 2021 02724

WHITEHORSE BOX HILL PTY LTD (ACN 602 569 013)	Plaintiff
v
ALLIANCE CG PTY LTD (ACN 162 853 563)	First Defendant
- and -
JOHN MCMULLAN	Second Defendant

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JUDGE:	Stynes J
WHERE HELD:	Melbourne
DATE OF HEARING:	Not heard
DATE OF JUDGMENT:	17 February 2022
CASE MAY BE CITED AS:	Whitehorse Box Hill Pty Ltd v Alliance CG Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2022] VSC 61

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PRACTICE AND PROCEDURE — Stay — Application for stay pending appeal — Maher v Commonwealth Bank of Australia [2008] VSCA 122, applied — 1155 Nepean Hwy Pty Ltd v Promax Buildings Pty Ltd (Final Orders) [2020] VSC 471, applied — Stay not justified in the circumstances.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	No appearance	No appearance
For the First Defendant	No appearance	No appearance

HER HONOUR:

1. The plaintiff (Principal) sought an order that the adjudication determination made by the second defendant (Adjudicator) dated 22 July 2021 (Adjudication Determination) be quashed or alternatively declared void. The Adjudication Determination was delivered under the Building and Construction Industry Security of Payment Act 2002 (Vic) (SOP Act).

2. Prior to the hearing, the sum of $898,366.65 (Adjudicated Amount) was paid into Court as a condition of the restraint agreed to by the first defendant (Contractor) in relation to enforcing the Adjudication Determination, and to secure the Adjudicated Amount pending the outcome of the judicial review commenced by the Principal.

3. On 1 February 2022, I handed down my reasons for dismissing the proceeding.   I then invited submissions from the parties in relation to the form of orders and costs.

4. The parties are in general agreement as to the appropriate orders to dispose of the proceeding, specifically orders that:

   (a)the Principal pay the Contractor’s costs of the proceeding, to be assessed on a standard basis in default of agreement; and

   (b)the Adjudicated Amount be released to the Contractor’s solicitors trust account.

5. However the Principal seeks a stay of judgment execution of 14 days so that it has further time to consider, and seek advice upon, the filing of an appeal.

6. The Principal submits:

   … the proceeding was commenced on 3 August 2021 but it was only able to be heard by the Court on 24 November 2021.

   … in the context of the Covid 19 constrained environment in which the Court and the parties have been required to operate fourteen days is a reasonable and proportionate period of time to allow the Plaintiff to consider the decision and in circumstances where the relevant funds are in held in Court will not cause undue prejudice to the Plaintiff.

7. The principles applicable to the exercise of my discretion to stay execution of the judgement are conveniently set out by Dodds-Streeton JA (with whom Redlich JA agreed) in the decision of the Court of Appeal in Maher v Commonwealth Bank of Australia.[1]  In summary:

   (a)prima facie, a successful party is entitled to the benefit of the judgment obtained and the presumption that the judgment is correct;

   (b)the applicant for a stay bears the onus of demonstrating that a stay is justified;

   (c)where an applicant for a stay has not demonstrated an appropriate case but has left the situation in the state of speculation or of mere argument, weight must be given to the fact that the judgment has been in favour of the other party;

   (d)an applicant for a stay must show special or exceptional circumstances to take the case out of the general rule that an appeal does not operate as a stay;

   (e)the Court has a wide discretion, which is not circumscribed by rigid rules.  It should take into account all the circumstances of the case;

   (f)special circumstances might exist where a successful appellant would be deprived of the fruits of the appeal if a stay of execution were not granted.  In such a case, the appeal might be rendered nugatory;

   (g)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 the judgment; and

   (h)a stay should not be granted unless there is at least an arguable ground of appeal, although otherwise speculation as to the ultimate prospects of success is usually inappropriate.

   [1][2008] VSCA 122, [19]–[27] (Dodds-Streeton JA).

8. I am also mindful of the comment made by Digby J in 1155 Nepean Hwy Pty Ltd v Promax Buildings Pty Ltd (Final Orders)[2] that in the context of a matter arising under the SOP Act, more than a real risk of the judgment being rendered nugatory may need to be established to satisfy the requirement of a special or exceptional circumstance sufficient to justify a stay of execution pending an appeal.   Such an approach derives support from the statutory adjustment of risk effected by that legislation in favour of claimant contractors.

   [2][2020] VSC 471, [70] (Digby J).

9. The Principal has not identified a proposed or possible ground of appeal.  

10. The only circumstance raised by the Principal in support of its application for a stay was the ‘context’ of COVID-19.  However the Principal has not explained why or how that ‘context’ justifies a stay depriving the Contractor of the benefit of the judgment.    

11. In these circumstances, I am not satisfied that a stay is justified.   

12. In my view, the grant of a stay in the present circumstances would serve to unfairly deprive the Contractor of the benefit of the judgment and, more specifically, the benefit of the Adjudicated Amount.

Orders

1. Accordingly, I propose to make the following orders:

   1.The sum of $898,366.65 (Adjudicated Amount) held by the Senior Master in the Senior Master’s Common Fund No.1 (Account No. 85804) as funds in Court be released and paid into the First Defendant’s lawyers trust account, being:

Name of Account:	HWL Ebsworth Lawyers Law Practice Trust Account
Name of Bank:	Westpac Banking Corporation
Address of Bank:	114 William Street, MELBOURNE, VIC 3000
SWIFT Code:	WPACAU2S (for international use only)
BSB:	033003
Account:	313396
Reference:	1072168

2.The interest accrued on the Adjudicated Amount from 9 August 2021 at the rate fixed in respect of Common Fund No. 1 be paid into the First Defendant's lawyers trust account in accordance with Order 1.

3.The First Defendant is relieved from the restraint the subject of Order No 3 of the orders made by the Honourable Justice Stynes on 5 August 2021.

4.The Second Defendant is relieved from the restraint the subject of Order No 4 of the orders made by the Honourable Justice Stynes on 5 August 2021.

5.The Plaintiff is to pay the First Defendant’s costs of the proceeding, to be assessed on a standard basis in default of agreement.

6.        The proceeding is dismissed.