Supreme Court New South Wales Medium Neutral Citation: Chadwick v Bondi Beach Food Pty Ltd (No 2) [2023] NSWSC 246 Hearing dates: 17 March 2023 Date of orders: 20 March 2023 Decision date: 20 March 2023 Jurisdiction: Common Law Before: Elkaim AJ Decision: (1) The costs orders made on 9 March 2023, are confirmed. (2) The judgment delivered on 9 March 2023, is stayed on condition that each defendant files a notice of appeal within 42 days of today's date and thereafter pursues the appeal in accordance with the applicable rules of court. (3) Each party is to pay its own costs of the application for a stay. (4) The defendants are to pay the plaintiff's costs of the application to amend the original costs' orders Catchwords: JUDGMENTS AND ORDERS – stay of execution – power to grant stay – likelihood that plaintiff will repay monies – conditional stay COSTS – UCPR 42.34 – where plaintiff recovers less than $500,000 – whether commencement and continuation of proceedings warranted Legislation Cited: Civil Liability Act 2002 Uniform Civil Procedure Rules 2005 (NSW) reg 42.34 Cases Cited: Alexander v Cambridge Credits Corporation Limited 2 [1985] 2 NSWLR 685 Chadwick v Bondi Beach Food Pty Ltd; Bondi Beach Food Pty Ltd v Crossguard Group Pty Ltd [2023] NSWSC 197 Norris v Routley [2016] NSWSC 147 Category: Principal judgment Parties: Clinton Chadwick (Plaintiff) Bondi Beach Food Pty Ltd (First Defendant) Crossguard Group Pty Ltd (Second Defendant) Representation: Counsel: Mr D Lloyd SC (Plaintiff) Mr M Kalyk (Plaintiff) Mr P M Morris SC (First Defendant) Mr N Polin SC (Second Defendant) Solicitors: Salerno Law (Plaintiff) McCabe Curwood (First Defendant) Hall & Wilcox (Second Defendant) File Number(s): 2019/00307732 Publication restriction: None JUDGMENT 1. On 9 March 2023, I handed down judgment in this matter (Chadwick v Bondi Beach Food Pty Ltd; Bondi Beach Food Pty Ltd v Crossguard Group Pty Ltd [2023] NSWSC 197). I found in favour of the plaintiff against both defendants in the sum of $200,706.40 plus costs. I also made orders on the cross-claims between the defendants, to the effect that they were to share the judgment in favour of the plaintiff, equally between them. 2. On 14 March 2023, the second defendant, by email, notified my Associate that it wished to apply for a stay of the judgment and an amendment of the costs orders. This application was set down for hearing on 17 March 2023. 3. The first defendant has joined in the application. 4. The parties provided written submissions. The plaintiff also relied on an affidavit of Mr Clifford Savala, the plaintiff's solicitor, dated 16 March 2023. 5. The principles for the grant of a stay were set out in Alexander v Cambridge Credits Corporation Limited 2 [1985] 2 NSWLR 685. These principles can be summarised as follows: 1. The judgment creditor is entitled to "the fruits of his victory". 2. An applicant for a stay does not have to establish special or exceptional circumstances. 3. The decision to grant, or not grant, a stay is always discretionary. 4. The applicant must establish "a proper basis for a stay that will be fair to all parties". 5. Simply filing an appeal is not a sufficient basis. 6. If a successful appeal would be of no consequence without a stay, for example because funds paid had been dissipated and were not recoverable, that fact favours a stay. 7. It is open to a court to make a preliminary assessment of the strength of an appeal as part of the considerations to be weighed up in the exercise of the discretion. 8. A stay may be granted on conditions to ensure fairness between the parties. 1. The primary basis for the stay seems to be that the plaintiff would not be able to repay any monies paid to him, should the appeal be successful. It was pointed out that the plaintiff gave evidence that he was in receipt of Centrelink benefits. 2. Neither defendant made a single submission about the grounds of appeal, not even to the extent of stating whether the appeal would relate to liability, quantum, or both. 3. Nevertheless, having regard to the manner in which the defendants pursued the plaintiff's claim during the hearing, effectively challenging every aspect of the claim, including liability, I have no doubt that the defendants will equally rigorously pursue an appeal. Although I found liability plainly established, there were certainly genuine arguments on quantum which, had I accepted all of the defendants' submissions, could have reduced the plaintiff's claim to a much smaller amount. 4. The difficulty for the plaintiff is not only that he is currently on Centrelink benefits, but also that the evidence during the hearing displayed a continuing inability to responsibly deal with funds that had come into his possession. For example, monies generated by his business, through its sales or by way of funding, seem to have been used for the plaintiff's personal use, perhaps even for the purchase of drugs. 5. The compelling factor for me, in respect of an appeal, is the unlikelihood of the plaintiff being able to repay any monies that he receives. Accordingly, I intend to grant a stay, but on the condition that a notice of appeal is filed by the defendants within 42 days from today. If either one of the defendants does not file an appeal, the stay against that defendant will automatically dissolve. 6. Turning now to costs, the defendants seek an order that each party should pay its own costs. This is based on the amount of money recovered by the plaintiff, in particular flowing from reg 42.34 of the Uniform Civil Procedure Rules 2005 (NSW) which states that a costs order is not to be made if the plaintiff receives a judgment of less than $500,000. 7. The rule has the condition, however, that a costs order "may be made, but will not ordinarily be made, unless the Supreme Court is satisfied the commencement and continuation of the proceedings in the Supreme Court, rather than the District Court, was warranted": reg 42.34(2)(a). 8. I was referred to a number of cases on reg 42, but have gained most assistance from the decision of Harrison J in Norris v Routley [2016] NSWSC 147. The defendants submitted that, at [10], his Honour was suggesting that making an order allowing costs would need to be based on circumstances which were "abnormal, unusual or extraordinary and possibly even exceptional having regard to the amount recovered by her in the proceedings". 9. If the defendants reading of Norris is correct, then these observations are tempered by two matters: 1. His Honour's reference to "having regard to the amount recovered by her in the proceedings" is a reference to the plaintiff in Norris having received a verdict of only $21,757. 2. At [11] and [16], his Honour went on to say: "11. It is trite to observe that whether or not the commencement and continuation of the proceedings in this Court was justified curiously requires a decision in retrospect about the wisdom of making the same decision looking forward. It is therefore very important to ensure that the benefit of hindsight does not infect a critical analysis of the decision in question, obviously made without the same advantage. The known certainty of what has now transpired should not be used to limit or reduce an appreciation of the very difficult task of assessing or predicting a multifaceted litigious outcome." 16. I have not a little sympathy for those entrusted with the decision of where to commence these proceedings. In my experience it is a decision that is often influenced by non-legal and emotional considerations that cannot lightly be disregarded. In accordance with the caution to which I have earlier referred, I have attempted to assess the decision prospectively, and not with the benefit of facts that have spawned the need to consider the rule in question. Taking those matters into account, I remain confronted with the fact that Dr Norris recovered a very modest sum indeed, and not without persistent warning from her opponent that such a result was likely. The continuation of the proceedings in this Court was clearly not warranted and I fear that their commencement falls into the same category." 1. The proceedings were commenced in 2019, when the jurisdictional limit of the District Court was $750,000. There is no evidence to suggest that the defendants would have consented to an extension of jurisdiction in the District Court. 2. Whether or not an extension would have been agreed is perhaps immaterial bearing in mind that the amount I awarded the plaintiff is significantly less than $750,000. The question then arises as to whether or not the pursuit of the proceedings was warranted. 3. The defendants have made the point that, although the plaintiff's claim for economic loss extended well beyond $750,000, it was based on the opinion of an expert who not been provided with basic material information which would have reduced his estimation of economic loss. 4. The plaintiff, in written submissions, has concentrated on the medical case that was presented to the court, in particular surrounding the existence of organic brain damage and a major psychiatric injury. 5. I found against an organic brain injury and generally calculated non-economic loss based on a continuing, but diminishing, post-traumatic stress disorder, together with a minor orthopaedic injury and some scarring. 6. The fact that I made the above findings does not mean that the plaintiff's case, on injury, was not put forward with appropriate foundation. The plaintiff, in particular through Dr Klug and Dr Rowe, provided evidence upon which brain damage and psychiatric injury could have been found. My findings were more based on my assessment of the plaintiff, as disclosed during the hearing, than any error made by either of the above two doctors. It is trite that an expert opinion will rise or fall on the validity of the assumptions upon which it is based. 7. Had I found in the plaintiff's favour on the medical issues, there would have been a significant effect on my findings of non-economic loss and future economic loss. The former would have contemplated suffering for the remainder of the plaintiff's life, the latter would have continued through to the end of the plaintiff's working life. 8. Past economic loss and out of pocket expenses may also have increased, but probably to a lesser degree. 9. Without speculating as to what the different figures might have been, the result would have been to substantially increase the damages. This is illustrated by the effects of the Civil Liability Act 2002 which has an inversely progressive discounted scale for non-economic loss. For example, my assessment of 25% of a most extreme case produced a figure of $46,000. Had I found 30%, the figure would have been $162,000, and at 35% the figure would have been $246,500. 10. Another important element, I think, is that my findings on the plaintiff's injury and continuing disability arose from the defendants' largely successful attack on his credit. While there may be a fine line between an allegation of gross exaggeration and fraud, the attack in this case was very close to an allegation of fraud. As this had never been pleaded the plaintiff's legal advisers had never been put on notice of the approach to be taken by the defendants and never considered this issue in the decision about the appropriate jurisdiction in which to commence the proceedings. 11. In my view, the commencement and continuation of the proceedings in the Supreme Court was warranted to the extent that I reject the application to amend my previously made costs orders. 12. In relation to the present application, the question of a stay did not form a significant part the hearing. 13. I note that the plaintiff's solicitors wrote to the second defendant's solicitors on 15 March 2023, asking for the basis for the stay and offering to obtain appropriate instructions. The second defendant's solicitors chose not to respond. My preliminary thought was that this inaction could justify a costs order in the plaintiff's favour on the application. However, to make this order would unfairly prejudice the first defendant, who was not 'copied-in' to the correspondence. 14. As far as the reg 42.34 application is concerned, the defendants have failed and should pay the costs. 15. I make the following orders: 1. The costs orders made on 9 March 2023, are confirmed. 2. The judgment delivered on 9 March 2023, is stayed on condition that each defendant files a notice of appeal within 42 days of today's date and thereafter pursues the appeal in accordance with the applicable rules of court. 3. Each party is to pay its own costs of the application for a stay. 4. The defendants are to pay the plaintiff's costs of the application to amend the original costs' orders. ********** Amendments 20 March 2023 - Amended Case Name to be No 2 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: 20 March 2023