Stingray Boats v Denmeade [2003] FCA 1172

FEDERAL COURT OF AUSTRALIA

Stingray Boats v Denmeade [2003] FCA 1172

APPEALS – application pending for special leave - where application for stay to preserve subject matter – where prospects of success a determinative fact Admiralty Rules

Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681 followed STINGRAY BOATS (a firm) v PHILIP DENMEADE (The Owner of the 12m Aluminium Ship Identification Number 25230) No Q 159 of 2002 SPENDER J BRISBANE 20 OCTOBER 2003

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY IN ADMIRALTY Q 159 OF 2002

BETWEEN: STINGRAY BOATS (a firm)

PLAINTIFF

AND: PHILIP DENMEADE (The Owner of the 12m Aluminium Ship Identification Number 25230)

DEFENDANT

JUDGE: SPENDER J

DATE OF ORDER: 20 OCTOBER 2003

WHERE MADE: BRISBANE

THE COURT ORDERS THAT: 1. The application of the Defendant filed 10 October 2003 for stay of orders made by Spender J on 26 September 2003 is refused. 2. The Defendant pay the Plaintiff's costs of the proceedings. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY IN ADMIRALTY Q 159 OF 2002

BETWEEN: STINGRAY BOATS (a firm)

PLAINTIFF

AND: PHILIP DENMEADE (The Owner of the 12m Aluminium Ship Identification Number 25230)

DEFENDANT

JUDGE: SPENDER J

DATE: 20 OCTOBER 2003

PLACE: BRISBANE

REASONS FOR JUDGMENT 1 On 26 September 2003, I ordered that the ship the subject of a maritime claim in respect of its construction by Stingray Boats be sold pursuant to the Admiralty Rules. In respect of that claim, I gave judgment in favour of Stingray Boats for $21,500 on 14 February 2003. The judgment was the subject of an appeal to the Full Court of the Federal Court, and on 31 March 2003 I granted a stay pending determination of the Full Court of the Federal Court in respect of that judgment. 2 On 5 September 2003 the Full Court amended the amount of the judgment to $20,500 and otherwise dismissed the appeal with costs. On 6 October, Stingray Boats obtained from the Court certificates of taxation in relation to the orders of the Court of 21 November 2002 and 14 February 2003. These two certificates together represent $19,090.44 in costs payable to Stingray Boats. 3 In respect of the application for a stay pending special leave to appeal, there appears to be no argument between the parties as to the legal principles to be applied. The leading authority is the judgment of Brennan J, as he then was, in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681 ("Jennings"). 4 From his Honour's judgment, one can distil the following propositions: first, jurisdiction to grant a stay depends on whether the stay is necessary to preserve the subject matter of the litigation. The jurisdiction arises if the application for special leave to appeal would be futile unless a stay was granted. Second, (at p 684) a stay to preserve the subject matter of litigation for special leave is: '... an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted.' 5 Third, in exercising the extraordinary jurisdiction to stay, the following factors (at p 685 of Jennings) are material to the exercise of a court's discretion: 'In each case, when the Court is satisfied a stay is required to preserve the subject- matter of the litigation, it is relevant to consider: first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies.' These principles have been invariably followed. 6 The second of the factors mentioned by Brennan J at p 685 of Jennings does not apply here, in that the application for a stay has been brought in the court in which the matter is pending. 7 In the context of those principles, it has to be noted that the application for special leave to appeal to the High Court by Mr Denmeade follows two determinations: by a single judge of the Federal Court, and by a Full Court of the Federal Court. His arguments, which are the subject of his application for special leave, have not hitherto been successful. 8 It is a fact that only a relatively small proportion of applications for special leave succeed. The reason for that is not hard to see. The High Court, in considering a special leave application, is not concerned with the question simply of whether there has been legal or factual error by the courts below the High Court. It is not, in that sense, an ultimate Court of Appeal. It is concerned with exercising a jurisdiction which focuses on questions of wide general importance, or of considerable public concern. Notwithstanding the submissions by Mr Denmeade, it seems to me that this particular application for special leave, while it clearly is of direct concern to the parties, particularly Mr Denmeade, is essentially confined to the resolution, favourably or unfavourably to the parties, of the particular factual issues in the case. I will turn to that later when considering the prospects of success. 9 Mr Denmeade says that if a stay is not granted, the ship which is his only major asset, would be irretrievably lost to him, and in those circumstances it is submitted that a stay should be granted so as to preserve the subject matter of the litigation. What has to be recognised, however, accepting that that contention is correct, is that the preservation of the subject matter of the litigation enlivens the jurisdiction to grant a stay but does not determine it. 10 It is necessary to have regard to the prospects of success of the application for special leave and, ultimately, the appeal and the balance of convenience. On the prospects of success, I have indicated the difficulties that face litigants seeking special leave, particularly those who are self represented and the historical fact of the lack of success, generally speaking, of such applications. Much of that lack of success is because there is not demonstrated either a strong public interest in the matter or a matter of general principle applying beyond the circumstances of the particular parties to a particular piece of litigation. 11 Notwithstanding the material referred to in the special leave application, and recognising that that application for special leave is not co-extensive with the submissions that might be made in support of it, the fact of the matter is that there are two broad bases for Mr Denmeade's application for special leave. The first of them concerns the question of duress. Mr Denmeade's application for special leave states that: 'The appellant court decision is a manifestly unjust error of law. The judgment of Barton v Armstrong (1973) 2 NSWLR (at 633; 120) cited in Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40, a case referred to in the judgment, was not followed ... The trial court finding that a majority of the claim was not justified, therefore, unlawful, should override the court's belief that the adequacy of the consideration is not important.' He says: 'The issue is of strong public interest because it is regarding the mix of spurious and existing claim under the umbrella of duress. It casts strong doubt on the finding of Santow J in Musumeci that the doctrine of economic duress can protect against extortionate demands. 12 While that submission might be difficult to follow, it reflects the fact that Mr McCourt would not release the boat unless Mr Denmeade signed an acknowledgment owing an amount less than, in fact, the amount which was the subject of an amended application to the Federal Court. 13 There was no controversy at either the trial or the appeal concerning the interpretation of principles dealing with economic duress. It seems to me that the position was that the Full Court accepted the principles but found, contrary to Mr Denmeade's submission, that the facts in his case did not amount to duress of the kind necessary to vitiate consent. This is not a question involving what constitutes duress but really a question of whether, as the Full Court found, it did not exist in the facts of the particular case. 14 Secondly, there is a suggestion that the finding of the Full Court that there had been a compromise agreement between the parties on 9 September was erroneous, and that there was no consideration for such an agreement. Involved in that is Mr Denmeade's claim that the claim by Mr McCourt to be entitled to extra payment was not made bona fide and was vexatious. That was not the view at first instance, or on appeal, and Mr Denmeade faces considerable difficulty in persuading the High Court that those claims are of such wide or general application that they go beyond the facts of the particular case and are appropriate for the grant of special leave. 15 I indicated earlier that the High Court, in granting or not granting special leave, is not concerned with the correctness or justice or fairness of the decision the subject of the application for special leave although that, of course, is a relevant factor. It is concerned whether the resources of the High Court can sensibly be expended in the resolution of matters of general importance or application. Having regard to that aspect of the matter, in my assessment, the prospects of success of Mr Denmeade's application for special leave are very poor. 16 Concerning the other relevant factor which applies, and that is the balance of convenience, I take into account the fact the claim by Mr Denmeade that if the boat were to be sold and his application for special leave were to be successful and his appeal ultimately succeed, then he would be unable, in a practical sense, to regain possession of the boat and would be left simply to a money claim. On the material before me, there seems to be no basis for thinking that his money claim would be empty in that there is evidence to suggest that the partnership, Stingray Boats, would have sufficient funds to make good any money claim to which Mr Denmeade might ultimately be held to be entitled. 17 On the other hand, on the question of balance of convenience, the fact is that Stingray Boats have had a money judgment since February 2003. That has been the subject of a stay pending the appeal by Mr Denmeade to the Full Court, an appeal which was, apart from the correction of a monetary amount, dismissed with costs. They have been expending costs of the Marshall of the order of $1000 a month and it is likely that if a stay were to be granted, expenditure of that order would continue at least until the middle, if not the end, of 2004 when the material indicates the application for special leave might then be heard. 18 A successful party is ordinarily entitled to the fruits of its judgment. Here, not only have they been denied the fruits of the judgment but have been responsible for expenditure of costs approaching $1000 a month since the date of the arrest of the vessel and, if a stay were to be granted, those costs would continue and, viewed overall, would be significant. It seems to me that the question of balance of convenience strongly inclines against the grant of a stay, but the primary reason on which I decline to order a stay of the order for the sale of the boat is my assessment of the prospects of success. 19 In all of the circumstances, and having regard to the matters that I have referred to, I think it right to decline to order a stay. The respondent to the application for a stay should have its costs of it. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender .