Body Corporate 172108 v Manchester Securities Limited

Body Corporate 172108 sought to liquidate Manchester Securities Limited, which opposed the application. Manchester Securities sought leave to appeal from Associate Judge Johnston's decision not to stay the liquidation proceedings, a decision which Body Corporate opposed. Manchester Securities wished to appeal two aspects of the Associate Judge's decision: (a) the conclusion that the Court was not required by sch 1, art 8 of the Arbitration Act 1996 to stay the Body Corporate’s liquidation proceeding because of the existence of arbitral proceedings commenced by Manchester Securities; and (b) the observation that the levies charged by the Body Corporate to Manchester Securities were obligations of a pay now, argue later nature.

Manchester Securities contended that the issues it wished to argue on appeal were significant, particularly the proper interpretation and application of the Arbitration Act, in particular, which is of general and public importance from the perspective of all those involved in dispute resolution. Body Corporate, however, argued that the proposed points of appeal were not ones that were directly before the Court. Manchester Securities' submissions had not argued that art 8 had direct application, but rather asked the Court to exercise its discretion to order a stay under r 31.11 of the High Court Rules 2016. The Body Corporate's argument that Manchester Securities was not entitled to a stay under art 8 was based on the proposition that the proceeding before the Court was not "brought in a matter which is the subject of an arbitration agreement." Manchester Securities had not contested the argument that the levies were payable on a pay now, argue later basis.

The court granted leave to appeal on both proposed grounds. The first ground of appeal raised a complex issue and was sufficiently arguable that it was in the public interest for the Court of Appeal to settle the matter. Manchester Securities' position was at least arguable, and the discretionary considerations in the Associate Judge's decision would have been irrelevant had art 8 required the Court to grant a stay. The second ground of appeal was also arguable, and the nature of the obligation to pay ordinary levies under the Unit Titles Act 2010 was an open question and one on which Court of Appeal authority would be useful. While the general and public importance of the issues were sufficient to outweigh the delay that would be caused to the liquidation proceeding, the court had doubts about the ultimate merits of the proposed appeal.