FEDERAL COURT OF AUSTRALIA Adrenalin International Powersports Pty Ltd v John Caines Management Pty Ltd [2004] FCA 506 PROCEDURE - application for stay of proceedings pending appeal – no evidence adduced that appropriate case for stay – application refused Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65, followed ADRENALIN INTERNATIONAL POWERSPORTS PTY LTD v JOHN CAINES MANAGEMENT PTY LTD & ORS V190 OF 2003 MARSHALL J 26 APRIL 2004 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V190 OF 2003 BETWEEN: ADRENALIN INTERNATIONAL POWERSPORTS PTY LTD (ACN 089 178 594) APPLICANT AND: JOHN CAINES MANAGEMENT PTY LTD (ACN 006 050 666) FIRST RESPONDENT PENELOPE ROSEWARNE SECOND RESPONDENT LIAM ROSSNEY THIRD RESPONDENT PETER BENSON FOURTH RESPONDENT JIM KNIGHT FIFTH RESPONDENT AND: JOHN CAINES MANAGEMENT PTY LTD (ACN 006 050 666) FIRST CROSS-CLAIMANT PENELOPE ROSEWARNE SECOND CROSS-CLAIMANT LIAM ROSSNEY THIRD CROSS-CLAIMANT PETER BENSON FOURTH CROSS-CLAIMANT JIM KNIGHT FIFTH CROSS-CLAIMANT ADRENALIN INTERNATIONAL POWERSPORTS CENTRE PTY LTD SIXTH CROSS-CLAIMANT AND: DAVID ANTHONY ARNOLD FIRST CROSS-RESPONDENT RAYMOND JOHN SOLOMON SECOND CROSS-RESPONDENT BRUCE VIVIAN THOMAS THIRD CROSS-RESPONDENT JUDGE: MARSHALL J DATE OF ORDER: 26 APRIL 2004 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The respondents' and cross-claimants' motion of 26 March 2004 be dismissed with costs. 2. The applicant be released from the undertakings provided by it to the Court on 7 April 2003 and 17 June 2003 respectively. 3. Costs be taxed as soon as practicable and be payable as soon as reasonably practicable thereafter. 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 V190 OF 2003 BETWEEN: ADRENALIN INTERNATIONAL POWERSPORTS PTY LTD (ACN 089 178 594) APPLICANT AND: JOHN CAINES MANAGEMENT PTY LTD (006 050 666) FIRST RESPONDENT PENELOPE ROSEWARNE SECOND RESPONDENT LIAM ROSSNEY THIRD RESPONDENT PETER BENSON FOURTH RESPONDENT JIM KNIGHT FIFTH RESPONDENT AND: JOHN CAINES MANAGEMENT PTY LTD (ACN 006 050 666) FIRST CROSS-CLAIMANT PENELOPE ROSEWARNE SECOND CROSS-CLAIMANT LIAM ROSSNEY THIRD CROSS-CLAIMANT PETER BENSON FOURTH CROSS-CLAIMANT JIM KNIGHT FIFTH CROSS-CLAIMANT ADRENALIN INTERNATIONAL POWERSPORTS CENTRE PTY LTD SIXTH CROSS-CLAIMANT AND: DAVID ANTHONY ARNOLD FIRST CROSS-RESPONDENT RAYMOND JOHN SOLOMON SECOND CROSS-RESPONDENT BRUCE VIVIAN THOMAS THIRD CROSS-RESPONDENT JUDGE: MARSHALL J DATE: 26 APRIL 2004 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 By notice of motion filed on 26 March 2004, the respondents and cross-claimants seek, in effect, a stay of the orders of the Court made on 18 March 2004 as a consequence of a judgment published on 10 March 2004. 2 The effect of these orders is that the applicant is entitled to the proceeds of the sale of land. The relevant money ("the fund") is being held in the trust account of the applicant's solicitors, where it is earning 5.2% interest. 3 The applicant's officers wish to have access to the fund to invest it such that it earns the applicant a higher rate of return than it is currently earning. The respondents and cross-claimants fear that the fund will be disbursed and their appeal against the judgment of 10 March 2004 (currently pending) will be rendered nugatory if a stay is not granted. 4 The directors of the applicant state that they do not intend to disburse the fund. I have no reason to disbelieve them. The directors wish to employ the fund to earn the applicant a greater rate of return than it currently receives. I see no difficulty with that course. The directors appear to be prudent businessmen who have no interest in employing the fund to the detriment of the applicant. 5 It was put by counsel for the respondents and cross-claimants that the fund could be put beyond the reach of the applicant and its creditors. No suggestion of that sort was put to Mr Arnold, a director of the applicant, when cross-examined on the motion. 6 The evidence before the Court on the motion establishes that the applicant's funds are able to be used to achieve a higher rate of return than the rate the fund is currently earning. 7 Although there is room for debate about the rate of return likely to be achieved in investing the fund, there is no doubt that a prudent use of the fund would be more profitable to the applicant than the current arrangements. 8 In short, I do not consider that the respondents and cross-claimants have demonstrated a reason or an appropriate case for a stay order: see Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 at 66. 9 I accept the submission of counsel for the applicant that there is no evidence that its directors intend to act other than prudently and commercially with respect to the fund. No adequate basis has been demonstrated why the applicant and cross-respondents should be deprived of the fruits of their success pending appeal. 10 It is appropriate to order as follows: 1. The respondents' and cross-claimants' motion of 26 March 2004 be dismissed with costs. 2. The applicant be released from the undertakings provided by it to the Court on 7 April 2003 and 17 June 2003 respectively. 3. Costs be taxed as soon as practicable and be payable as soon as reasonably practicable thereafter. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. Associate: Dated: 27 April 2004 Counsel for the Applicant: Mr M.Dreyfus QC with M.Robins Solicitor for the Applicant: Nathan Kuperholz Counsel for the Respondent: Mr S. Anderson Solicitor for the Respondent: Darren Moses Date of Hearing: 26 April 2004 Date of Judgment: 26 April 2004