Yates Property Corporation Pty Ltd v Boland

[1999] FCA 1002

FEDERAL COURT OF AUSTRALIA

Yates Property Corporation Pty Ltd v Boland [1999] FCA 1002

YATES PROPERTY CORPORATION PTY LIMITED & ANOR v JOHN BOLAND (as representative of Abbott Tout Russell Kennedy Solicitors) & ORS

NG 495 of 1997
NG 716 of 1997
NG 717 of 1997

GOLDBERG J
SYDNEY
4 JUNE 1999

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	NG 495 of 1997 NG 716 of 1997 NG 717 of 1997

BETWEEN:

YATES PROPERTY CORPORATION PTY LIMITED
First Applicant

IAN FRANCIS YATES
Second Applicant

AND:

JOHN BOLAND
(as representative of Abbott Tout Russell Kennedy Solicitors)
First Respondent

THEODORE SIMOS
Second Respondent

JOHN WEBSTER
Third Respondent

JUDGE:

GOLDBERG J

DATE OF ORDER:

4 JUNE 1999

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

(1)The applicants be restrained from taking any steps consequent upon the issue of a certificate of taxation in respect of the taxation of the costs ordered by the Full Court of the Federal Court to be paid by the first and third respondents to the applicants on 5 August 1998 or seeking otherwise to recover such costs pending the decision of the High Court on the appeals or further order.

(2)The applicants pay the first and third respondents’ costs of the two motions.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	NG 495 of 1997 NG 716 of 1997 NG 717 of 1997

BETWEEN:

YATES PROPERTY CORPORATION PTY LIMITED
First Applicant

IAN FRANCIS YATES
Second Applicant

AND:

JOHN BOLAND
(as representative of Abbott Tout Russell Kennedy Solicitors)
First Respondent

THEODORE SIMOS
Second Respondent

JOHN WEBSTER
Third Respondent

JUDGE:

GOLDBERG J

DATE:

4 JUNE 1999

PLACE:

SYDNEY

EX TEMPTORE REASONS FOR JUDGMENT

HIS HONOUR:

1. On 5 June 1997 Branson J dismissed the applicants’ application in the proceeding against the respondents and on 14 August 1997 her Honour ordered the applicants to pay the respondents’ costs.  An appeal was lodged by the applicants and it proceeded against the first and third respondents.  The appeal against the second respondents was dismissed on 13 February 1998, the applicants were unable to comply with an order for security for costs in respect of the appeal against the second respondent. 

2. On 5 August 1998, the Full Federal Court allowed the appeals by the applicants against the first and third respondents and ordered the first and third respondents to pay the applicants’ costs of the appeal.  That order was corrected under the slip rule on 30 November 1998.  On or about 2 September 1998 the first and third respondents lodged applications with the High Court for special leave to appeal against the orders of the Full Federal Court.

3. On 12 February 1999 the High Court granted special leave to appeal and I am told that the appeal is listed for hearing on or about 2 August 1999.  The first and third respondents have filed motions seeking a stay in respect of the Full Federal Court’s orders in respect of the costs ordered to be paid to the applicants by the first and third respondents.  The applicants filed a bill of costs on 7 January 1999 and on 22 February 1999 a District Registrar notified the parties in accordance with O 62 r 46(3)(b) that the costs had been fixed in the sum of $215,000.

4. No objection was lodged within fourteen days in accordance with Or 62 r 46(3)(c).  Accordingly if the applicants ask for a certificate of taxation to issue, that will occur as an administrative act and interest will thereupon commence to run on the unpaid costs in favour of the applicants. 

5. It is admitted by the applicants that they are impecunious and that their position has not changed since Davies J handed down his reasons for judgment on the respondents’ application for security costs for costs on 16 January 1998.  His Honour found then that Yates Property Corporation Pty Limited was impecunious and that Mr Yates had no assets other than his shares in the company.  The respondents submitted that in these circumstances there is a real likelihood that if the costs are paid and the appeal is dismissed by the High Court the costs will not be recoverable.  The authorities established that where the High Court has granted special leave to appeal this Court has a discretion to grant a stay which discretion is not circumscribed by a need to establish exceptional circumstances:  see Smith v New South Wales Bar Association (1991) 104 ALR 386‑388 and Advanced Building Systems v Ramsett Fasteners Aust Pty Limited (1997) 145 ALR 121, 123.

6. In Australian Federation of Consumer Organisations Incorporated v Tobacco Institute of Australia Limited (No 2) (1991) 30 FCR 548 Morling J in considering the circumstances in which the stay should be granted said at 550‑551:

   “The principles upon which orders made at first instance should be stayed are referred to in a number of cases referred to in the practice books and I shall not refer to all of them.  For present purposes it is sufficient to refer to what was said in Andrews v John Fairfax & Sons Ltd [1979] 2 NSWLR 184 and particularly to a passage quoted by Maxwell J from Bridges v Australian Consolidated Press Ltd (unreported, Court of Appeal, NSW, Sugerman P, 16 June 1970).  In Bridges, Sugerman P (with whom Jacobs and Mason JJA concurred) said:

   ‘The two prime requirements which need to be fulfilled in order that a stay of proceedings upon a verdict at common law should be granted appear to be, first of all, that if the damages and costs were paid there would be no reasonable probability of getting them back if the appeal succeeds and, secondly, that there should be reasonably arguable grounds of appeal.’”

   I would with respect, adopt those passages and his Honour’s observations.  In the present case this second requirement is sufficiently satisfied by the fact that the High Court has granted special leave to appeal.  I am also satisfied that the first requirement is satisfied having regard to the fact that the applicants are impecunious.  In Carter v Geoff Layton and Co Pty Limited (1993) 43 FCR 593 Cooper J refused to grant a stay in relation to a judgment for damages and costs. His Honour said (at 394) that:

   “It does not follow that the mere absence of wealth will justify a stay of a right to recover a judgment.”

   However, his Honour specifically found that there was no material before him in that case to suggest that the beneficiary of the judgment was insolvent; that is substantially not the case here. 

7. The applicants submitted that the respondents are insured in respect of the litigation so that they cannot assert prejudice.  It was submitted that there is no evidence that the respondents will have to pay $215,000.  I do not regard any insurance situation which may exist in relation to the respondents as relevant to whether or not the stay should be granted.  The primary obligations on the respondents to pay the costs, it is their obligation to discharge the order.  How they discharge that obligation is not relevant for present purposes.  I am therefore satisfied that an order should be made staying the carrying into effect an implementation of the costs order made by the Full Federal Court pending the handing down of the High Court’s decision on the appeal or further order.  However, the applicants should not be prejudiced by any inability to have interest accrue on the costs order until that time.  A certificate of taxation should be allowed to issue but the applicants should be restrained from taking any steps consequent upon the issue of a certificate of taxation in respect of the taxation of the costs ordered by the Full Federal Court to be paid by the first and third respondents to the applicants on 5 August 1998 or seeking otherwise to recover such costs pending the decision of the High Court on the appeals or further order.

8. The applicants should pay the first and third respondents costs of the motions.  I would therefore, subject to what the parties wish to say as to the form of order, order that:

   (1)The applicants be restrained from taking any steps consequent upon the issue of a certificate of taxation in respect of the taxation of the costs ordered by the Full Court of the Federal Court to be paid by the first and third respondents to the applicants on 5 August 1998 or seeking otherwise to recover such costs pending the decision of the High Court on the appeals or further order.

   (2)The applicants pay the first and third respondents costs of the two motions. 

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg.

Associate:

Dated:            4 June 1999

Counsel for the Applicants:	Mr R Gorzyca
Solicitor for the Applicants:	Bruce & Stewart
Counsel for the First Respondent:	Mr A G Bell
Solicitor for the First Respondent:	Minter Ellison
Counsel for the Third Respondent:	Mr S White SC & Mr J Webster
Solicitor for the Third Respondent:	Moray & Agnew
Date of Hearing:	4 June 1999
Date of Judgment:	4 June 1999