DEMPSTER v COATES SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KirByY P, MCHUGH and CLARKE JJA 28 March 1988 [1988] NSWCA 36 PRACTICE & PROCEDURE — stay of execution — conditions as to payment of part of verdict fixed by trial judge as a condition for a stay — application to Court of Appeal for stay — proper approach to order by trial judge — Jennings Construction Ltd vy Burgundy Royale Investments Pty Ltd (1986) 61 ALJR 102 referred to — need to protect utility of appeal — Alexander & Ors vy Cambridge Credit Corporation Ltd (Receivers Appointed) & Anor (1985) 2 NSWLR 685 discussed held: (Kirby P and Clarke JA; McHugh JA dissenting) Part payment of verdict sum should be paid into joint account administered by solicitors — not paid directly to respondent — discussion of proper approach to stay applications where trial judge has fixed terms of stay pending appeal. ORDERS (By majority) 1. Order that the summons for leave to appeal be referred to the Registrar to be listed for hearing before the Court constituted to hear the appeal in the proceedings between the parties. 2. Order that execution of the judgment directed by McInerney J to be entered pursuant to the verdict of the jury be stayed upon the condition that, within twenty-eight days, the claimant pay into an account to be established and jointed administered by the solicitors for the claimant and the opponent the sum of $70,000, such sum to remain in such account to abide the outcome of the appeal or until further order of the Court. 3. Order that the claimant pay the opponent's costs of and incidental to the motion. Kirby P Before the Court are two proceedings. one is a summons for leave to appeal from a decision of McInerney J given in the course of defamation proceedings between the parties. on 3 February 1988, at the outset of a trial, his Honour declined an application, made on behalf of the defendant by his wife, for an adjournment of the hearing of the proceedings until 8 February 1988. The claimant wishes to challenge that order. Considering that it may be an interlocutory order which could only be challenged by way of a summons for leave to appeal, he has filed a summons for that purpose. The summons accompanies a notice of appeal as of right which seeks to challenge the final outcome of the trial before McInerney J and a jury. After McInerney J refused the adjournment, that trial proceeded on 1, 3, 4, 5, 8 and 9 February 1988. It resulted in a verdict of the jury in favour of the opponent on 10 February 1988. Following the jury's verdict his Honour directed that judgment be entered in favour of the opponent in the terms of the jury's verdict. Summons for leave to appeal There are many matters in the notice of appeal which go beyond the issue raised by the summons. One of these, for example, concerns an argument about the effect of the settlement of certain associated proceedings as they are said to impinge upon the quantification of the jury's verdict. In due course the notice of appeal will bring the claimant's appeal to the Court. The challenge to what McInerney J ordered on 3 February 1988 declining the application for an adjournment and whether, in law, that decision has now merged in the final 2 UNREPORTED JUDGMENTS judgment for the purpose of the appeal, are matters that may most conveniently be determined by the Court when it deals with the appeal, as in due course it will. Accordingly, rather than to deal with the summons today, it is my opinion that it is more appropriate for the summon for leave be determined, as necessary, by the Court hearing the appeal. I would propose that the summons be referred to the Court to be disposed of in due course cOncurrently with the appeal. Motion for a stay A motion is also before the Court for the purposes of securing a stay of the execution of the judgment which McInerney J directed to be entered following the jury verdict. The total verdict in favour of the opponent was the sum of $120,000. His Honour ordered that a stay should be granted upon terms that the sum of $70,000 be paid to the opponent within twenty-eight days. His Honour ordered a stay of execution of the judgment upon such terms until the appeal was disposed of or until this Court otherwise ordered. The motion now being before us, it is necessary for this Court to exercise its own discretion in the application for the stay that is made. However, there are reasons of common sense why this Court, exercising its own discretion, will take account of the terms upon which the trial judge fixed the conditions of the stay. Such a course can be followed in many cases because of the superior knowledge of the trial judge of the whole circumstances and facts in the case and his consequent ability to provide appropriate terms upon which a stay should be granted. That is not to say that this Court will surrender its discretion to the way the trial judge has exercised his discretion. It is simply to say that, in fulfilling its function, this Court will pay due regard to the terms fixed by the trial judge. A similar course to this was proposed by the High Court of Australia in Jennings Construction Limited v Burgundy Royale Investments Pty Ltd (1986) 61 ALJR 102. Brennan J there suggested that following an application for special leave to the High Court, it would normally be appropriate for the terms of any stay of execution of the judgment appealed against to be determined by the court from which the appeal came. Since Burgundy Royale this Court, reversing its earlier practice, has in many cases fixed those terms thereby relieving the High Court of the necessity to do so. See John Fairfax & Sons Ltd v Kelly (No 2) (1987) 8 NSWLR 510, 512. I therefore start upon the consideration of the claimant's application with due regard to the fact that the opponent has succeeded at the trial, has the benefit of a substantial judgment and has the order of his Honour that $70,000 be paid within twenty-eight days as a term of any stay of execution of the judgment. On the other hand, the purpose of the stay application to to protect the utility of the process of this Court. In Alexander & Ors v Cambridge Credit Corporation Ltd (Receivers Appointed) & Anor (1985) 2 NSWLR 685, 694-5, the Court emphasised the fact that it would protect that process, where appropriate, by making stay orders. In the present case, it is possible that the payment of the sum of $70,000 to the opponent could result in difficulty in the claimant's later recovering that sum in the event that he were to succeed on the appeal. Addressing this issue, the parties have placed before the Court some evidence relating to the means of the opponent. However, none of that evidence deposes to the current assets of the opponent save for evidence in the affidavit of Mr Peter Montgomery, solicitor for the opponent, that the opponent has a remuneration package with a company, Austus Properties Limited, which produces an annual URJ DEMPSTER v COATES (McHugh JA) 3 income of $100,000. Such an income makes it unlikely that the opponent would be unable to repay the sum of $70,000 if it were paid to him. However, in the absence of evidence concerning the assets of the opponent, I would not feel comfortable to so determine. In any case, I believe that the position of the opponent can be satisfactorily protected by this Court's granting a stay but on the terms that the amount (which will be the sum as McInerney J ordered), namely $70,000, be paid into a fund to be administered by the solicitors for the respective parties and invested by them for the benefit of the ultimate victor in the litigation. This is a course which is frequently followed in the Court. It is followed out of the knowledge that occasions have arisen where judgment moneys have been paid over to the successful party only to prove difficult to recover in the subsequently successful appeal. I am not saying that that would happen in the present case. But against the risk that it might happen, I think that the fund should be created and the moneys in the sum specified paid into that fund. In this way it remains under the effective control of the Court, the solicitors being officers of the Court. Orders The orders which I would therefore propose are:- 1. Order that the summons for leave to appeal be referred to the Registrar to be listed for hearing before the Court constituted to hear the appeal in the proceedings between the parties. 2. Order that execution of the judgment directed by McInerney J to be entered pursuant to the verdict of the jury be stayed upon the condition that, within twenty-eight days, the claimant pay into an account to be established and jointed administered by the solicitors for the claimant and the opponent the sum of $70,000, such sum to remain in such account to abide the outcome of the appeal or until further order of the Court. 3. Order that the claimant pay the opponent's costs of and incidental to the motion. McHugh JA I agree with the President's judgment except insofar as it provides that the opponent will not receive the sum of $70,000. The order which McInerney J made required the claimant to pay the sum of $70,000 to the opponent within a period of twenty-eight days. That order was made against a background of his Honour ordering the claimant to pay indemnity costs to the plaintiff. The general rule is that a successful party is entitled to the fruits of his verdict unless there is some ground for concluding that in the event of an appeal being successful, the appellant will not be able to recover back the verdict moneys. In this case, although apparently the claimant was given the opportunity to tender evidence before McInerney J as to the means of the opponent, not a scintilla of evidence was put before him. From the relationship of the parties, it is obvious that the claimant would be well aware of the means of the opponent. In this motion, an affidavit was put on by Mr Barnett, a chartered accountant, in which he concluded that the company of which the opponent is the managing director is a very questionable investment. That opinion has little, if any, relevance to these proceedings However, other uncontradicted evidence before the Court shows that the opponent has a remuneration package of $100,000 paid to him by the company of which he is managing director and which is listed on the second board of the Australian Stock Exchanges. He also holds 144,022 shares in that company and he is associated with a company which has a further 30,000 fully paid shares. There is uncontradicted evidence that the directors of 4 UNREPORTED JUDGMENTS the listed company, some of which are well-known commercial figures, have expressed the opinion that the shares have a nett asset backing in excess of $1.15. It is true that the opponent has not put on any evidence as to his means. This is perfectly understandable. He does not have to open the privacy of his own affairs without some showing, by way of evidence, that he would be unlikely to be able to repay the verdict moneys. In all the circumstances I cannot see any ground whatever for interfering with McInerney J's exercise of discretion in this matter. Insofar as this Court has an independent discretion in the matter, I would come to the same conclusion as his Honour. Clarke JA I agree with the orders proposed by the learned President. I have inmind very much that there is an appeal against liability, albeit perhaps not a very strong appeal but nevertheless an appeal against liability, the end result of which may be that a new trial is ordered. Whilst I recognise the general principle of which McHugh JA speaks, I have a strong view that it applies with particular force in debt and breach of contract cases. Where one is concerned with compensation, whether for personal injuries or for libel, I am not persuaded that that rule applies with the same force. It seems to me that is very important for the Court to ensure that if moneys are paid to a successful party there is no real risk of dissipation. If a fund is set up from which the moneys can be paid to the successful plaintiff if the appeal against the verdict is dismissed and in circumstances enabling him to have the benefits of the interest accruing from that fund during the time of investment then that risk is avoided. In this way he gets the benefit of the moneys if the appeal is unsuccessful and yet the appellant is at no risk of having paid moneys and, after successfully appealing, not being able to obtain a refund. In the light of an intuitive caution bred from some experience in the commercial list, I agree strongly with the order suggested by the learned President. (By majority) 1. Order that the summons for leave to appeal be referred to the Registrar to be listed for hearing before the Court constituted to hear the appeal in the proceedings between the parties. 2. Order that execution of the judgment directed by McInerney J to be entered pursuant to the verdict of the jury be stayed upon the condition that, within twenty-eight days, the claimant pay into an account to be established and jointed administered by the solicitors for the claimant and the opponent the sum of $70,000, such sum to remain in such account to abide the outcome of the appeal or until further order of the Court. 3. Order that the claimant pay the opponent's costs of and incidental to the motion.