Supreme Court New South Wales Medium Neutral Citation: Diamond World Jewellers Pty Ltd v Catlin Australia Pty Ltd [2021] NSWSC 1664 Hearing dates: 16 December 2021 Date of orders: 16 December 2021 Decision date: 16 December 2021 Jurisdiction: Common Law Before: Beech-Jones CJ at CL Decision: (1) Pending further order of the Court, the orders made in these proceedings on 30 November 2021 be stayed conditional upon payment by Catlin Australia Pty Ltd to Diamond World Jewellers Pty Ltd of $400,000 on or before 31 January 2022. (2) Costs of the Notice of Motion be costs in the appeal. Catchwords: STAY – stay pending appeal – no question of principle Cases Cited: Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 Diamond World Jewellers Pty Ltd v Catlin Australia Pty Ltd [2021] NSWSC 1431 Diamond World Jewellers Pty Ltd v Catlin Australia Pty Ltd (No 2) [2021] NSWSC 1540 Woolworths Limited v Strong (No 2) [2011] 80 NSWLR 445 Category: Consequential orders Parties: Diamond World Jewellers (Plaintiff/Respondent) Catlin Australia Pty Ltd (Defendant/Applicant) Representation: Counsel: S Gray (Plaintiff/Respondent) G Watson SC (Defendant/Applicant) Solicitors: Pikes & Verekers Lawyers (Plaintiff) Lander & Rogers Lawyers (Defendant) File Number(s): 2019/374929 EX TEMPORE Judgment (Revised from transcript) 1. On 5 November 2021 Schmidt AJ gave the principal judgment in these proceedings (Diamond World Jewellers Pty Ltd v Catlin Australia Pty Ltd [2021] NSWSC 1431). Her Honour upheld a claim by the plaintiff, Diamond World Jewellers Pty Ltd ("Diamond World"), against the defendant, Catlin Australia Pty Ltd ("Catlin"), in respect of a claim for insurance cover arising out of a robbery of jewellery at Diamond World's premises. 2. On 30 November 2021 her Honour gave a further judgment (Diamond World Jewellers Pty Ltd v Catlin Australia Pty Ltd (No 2) [2021] NSWSC 1540). Her Honour quantified the judgment sum in the amount of $1,431,759 and ordered Catlin to pay Diamond World Jewellers costs of the proceedings as agreed or assessed up to and including 18 August 2021 and thereafter on an indemnity basis. 3. By notice of motion taken to be filed in court this morning Catlin seeks an order staying her Honour's orders made on 30 November 2021. Read in support of the application for the stay is an affidavit from Catlin's solicitor annexing a notice of appeal containing four grounds as well as certain correspondence. 4. In the circumstance where I was not the trial Judge and have only had available to me her Honour's judgment, I am in a poor position to make an assessment of the relative prospects of the grounds of appeal. Subject to what follows, I will proceed upon the assumption that they are reasonably arguable. 5. In the correspondence the Catlin solicitors requested Diamond World's solicitors to consent to a stay. They pointed to evidence given by Diamond World's principal that it is no longer trading. Diamond World's solicitor responded expressing concern about Catlin's solvency during the period pending an appeal and reciting their instructions that, even though Diamond World is no longer trading, it retains a substantial amount of jewellery stock. They also pointed out that in Catlin's amended defence it appeared to accept that Diamond World was entitled to a payment of $367,990. They referred to a passage in the transcript which they contended amounted to a concession by Senior Counsel for Catlin that an amount of $500,000 was at least agreed to by his client as the amount owing. 6. As I stated, the principal proceedings involved a claim for cover on an insurance policy in respect of jewellery stolen from Diamond World's premises. It seems that there was no issue that cover was engaged but the real question concerned the amount of the claim. Catlin's contention was that the various clauses that engaged cover were predicated on it receiving appropriately substantiated material from Diamond World and forming bona fide opinions as to the amount of the claim. For the purposes of this motion I will proceed on the basis that its assumption concerning the construction of the insurance contract is correct. 7. Throughout the principal judgment there are references to the fact that Catlin appear to accept that at least a certain amount of Diamond World's claim had been substantiated. Paragraph 18 of Catlin's defence as amended contained an admission that the "value of the loss that the defendant has assessed that the plaintiff is entitled to under the policy" was $367,990.78. The next part of the pleading stated that, in answer to the whole of the claim, that Diamond World's claim for recovery must fail because it had allegedly not approached the matter in good faith and, in particular, it had presented a claim which is not a true reflection of its entitlements under the policy. 8. Her Honour's judgment also makes reference to an offer that was made by Catlin to settle the Diamond World's claim in the amount of $500,000. Paragraph 256 of the principal judgment sets out the terms of the offer which appear to be predicated upon Diamond World accepting that amount in full and final settlement of its claim. Hence, that offer appears to be conceptually different to the admission in the defence, in that the offer of $500,000 appeared to be by way of an attempt to compromise the entire claim, whereas the admission in the defence appeared to oblige Catlin to pay over the amount of $367,990.78 but leave Diamond World free to litigate over the balance of its claim. 9. In the correspondence exchanged between the parties that I referred to earlier Diamond World's solicitor set out a passage from the submissions before her Honour which they contended involved a concession that the amount assessed as owing under the policy was $500,000. Senior Counsel for Catlin disputes that characterisation. In the absence of seeing the full transcript I am not in a position to assess that matter. Instead I will rely upon what I have discerned from the principal judgment. 10. On this application I queried with Senior Counsel for Catlin why at least an amount representing the figure of $367,990.78 should not be paid forthwith. He contended that, at least on the question of balancing prejudice, that approach would overlook that, if his client was successful on the appeal and the costs orders below were reversed, then it is likely that the amount of costs payable to his client would consume most, if not all, of that agreed amount of the claim. That may or may not be so but it must be said, at least on my reading of the judgment, if the outcome of the appeal was simply the substitution of the full judgment amount for judgment for $367,990.78, then, in light of Catlin's approach to the litigation to date, there is significant room for doubt as to whether it would obtain a costs order in its favour. I otherwise note that the notice of appeal simply seeks setting aside of her Honour's order and judgment for the defendant. 11. Senior Counsel for Catlin drew my attention to the statement by Campbell JA in Woolworths Limited v Strong (No 2) [2011] 80 NSWLR 445 at [68] which identified the "usual practice of staying judgments pending appeal where there is a risk the plaintiff will be unable to pay money without difficulty or delay if the appeal were to succeed". That statement needs to be seen in the context of the authoritative discussion of the circumstances in which stays pending appeal will be granted in Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 at 694 to 695, which at 695 noted that: "…[A]lthough courts approaching applications for a stay will not generally speculate about the appellant's prospects of success, given that argument concerning the substance of the appeal is typically and necessarily attenuated, this does not prevent them considering the specific terms of a stay that will be appropriate fairly to adjust the interest of the parties, from making some preliminary assessment about whether the appellant has an arguable case." 1. In this case I accept from the limited material I have that there is a substantial risk that, if the full judgment amount is paid over and Catlin were successful on appeal even by only reducing the full judgment amount to the amount Catlin agrees is owing, that it would be significantly prejudiced by the difference paid over in the meantime. That said, bearing in mind the observations in Cambridge Credit, I find it difficult to see how any realistic outcome of the appeal is anything less favourable to Diamond World than the substitution of the judgment entered by her Honour by a judgment in the amount of $367,990.78. Further, at least as things stand, if that was the outcome there would be significant doubt as to whether Catlin would recover its costs or at least an amount of costs that would substantially eat away at that sum. 2. As for the concern raised by Diamond World about Catlin's solvency, to an extent that will be accommodated for by the order I will make which will involve the grant of a stay conditional upon the payment of a particular sum by a particular date. Beyond that I note that the risk that their insurer will be insolvent was a risk that they assumed from the commencement of the proceedings and that risk will pertain whether payment is made now or later. 3. Bearing in mind these considerations I will order a stay of the judgment but it will be conditional upon the payment by Catlin to Diamond World of the sum of $400,000 on or before 31 January 2022. The costs of the notice of motion will be costs in the appeal. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 December 2021