LONGREACH GOLD OIL LTD v GENOA RESOURCES PTY LTD (IN LIQUIDATION) [No 1] SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P 3 September 1991, 3 September 1991 [1991] NSWCA 175 PRACTICE and PROCEDURE — stay — appeal as of right to Court of Appeal — belated application — earlier summons for leave to appeal from interlocutory order refused — no evidence to support basis of challenge to judgment — claimant a public company — opponents in liquidation — held: A short stay should be provided to the next motion list to permit evidence to be filed within a strict timetable — costs order on solicitor and client basis. Corporations Act 1989 (Cth), s460(2)(a). ORDERS 1. Order that the execution of the judgment of Brownie J in the Commercial Division of the Supreme Court in proceedings number 50429/80 be stayed until 4 pm on Monday 9 September 1991, or until any further or other order of a Judge of Appeal or of the Court; and 2. That the claimant pay the opponent's costs of the motion on a solicitor and client basis. Kirby P Before the Court is a problem which is common to the administration ofjustice. It has been faced by judges virtually every day in the 800 year old history of our system. It is the need for urgent relief where the party seeking relief is not in a position to support its claim with evidence but promises shortly to do so. An urgent application came before Young J this morning for the stay of an order in the Commercial Division of the Supreme Court. Correctly, his Honour referred the matter to the Court of Appeal. The matter was listed before me, urgently, at 2.15 pm. In the way the matter has proceeded, I am asked to deal with the claimant's application without proper evidence. Such evidence is not before me now. Accordingly, I gave leave to counsel for the claimant to outline orally the nature of the material which he would seek to place before the Court if time were allowed within which the claimant could file evidence in the normal way, returning the motion then in the ordinary motion list of the Court on Monday next. The motion is for the stay of a judgment entered by Brownie J on 29 October 1990. On that day, his Honour entered judgment in favour of the first opponent, Genoa Resources Investment Ltd (In Liquidation), (Genoa) against the claimant, Longreach Gold Oil Ltd (Longreach), a public company. The circumstances in which the judgment was entered were unusual. Counsel then appearing for the claimant withdrew from the proceedings upon the intimation by Brownie J that he did not accept a submission which had been put, in effect, that the first opponent was not the proper creditor. The contention was that Longreach did not owe an amount on a loan to Genoa but to another company, Hartogen Energy Ltd - also in liquidation - the second opponent. When counsel withdrew, his Honour proceeded to give judgment for the first opponent in the sum sued for. That judgment was, and remains, unpaid. 2 UNREPORTED JUDGMENTS As a consequence of the failure of the claimant to pay the judgment, a notice was given to the claimant in accordance with s460(2)(a) of the Corporations Act 1989. Upon the failure of the claimant to comply with that notice, a summons was issued out of the Supreme Court for the winding up of the claimant. That summons was issued in May 1991. The summons was ultimately returned before Master McLaughlin this morning. The Master was then asked by the claimant to stay proceedings upon the summons. That was the matter which eventually came before Young J, and in due course has been referred to this Court. The appeal from the judgment entered by Brownie J was before this Court in another form on 10 December 1990. On that day, an application was considered by which the claimant sought leave to appeal from an interlocutory order made by Brownie J in the course of what I will call the principal proceedings. His Honour had there refused to give leave to the claimant to file a cross-claim in those proceedings. This Court, for reasons given by Priestley JA, refused leave to the claimant to appeal from that order. It will be obvious from the reasons of Priestley JA on behalf of the Court (Meagher JA, Waddell A-JA and himself) that the Court was there dealing strictly with the application for leave to appeal from the interlocutory order. At the end of his reasons, Priestley JA reserved the entitlement of the claimant to seek stay of the principal judgment, which Brownie J had entered in the circumstances which I have described. An appeal from that judgment, being final, does not require leave. It lies as of right. It is execution upon that judgment which now, belatedly, the claimant seeks to have stayed by order of this Court. At the moment, it is difficult to see the basis for the claimant's appeal from the judgment entered by Brownie J. However, I shall assume in this application that a basis may eventually be established that the first opponent was not the correct debtor. That, I understand, is a matter which the claimant will seek to argue on the appeal. In the light of the foregoing facts, there is no doubt that the claimant has failed properly to prosecute a stay of the principal judgment. It did not do so immediately after the pronouncement of the principal judgment. It did not do so immediately after th.e judgment was entered. It did not do so immediately after the notice was given to it under the Corporations Act. Nor did it do so immediately after the summons for its winding up was filed. Only now does it come before the Court, initially at first instance, and now the Court of Appeal, seeking a stay order. The situation is clearly unacceptable. On the other hand, I believe that the claimant should have the opportunity of placing before the Court the material with which it wishes to advance, in a proper fashion, the argument for a stay. Counsel was not able to do so today. Whilst that inability is simply a further illustration of the neglect which has attended the defence of the claimant's interests at every stage of this dispute, I have to keep in mind that, behind the claimant, a public company, stand a large number of shareholders. I am informed that there are about 15,000 shareholders. If the company is today wound up by order of Master McLaughlin (as I would anticipate would happen if the principal judgment were not stayed) those shareholders could lose, effectively, the opportunity of having their position protected in respect of the principal judgment. WRNGREACH GOLD OIL LTD v GENOA RESOURCES PTY LTD (IN LIQUIDATION) [No 9 (Kirby P) Relevant to my consideration is the fact that the first opponent is itself in liquidation. Therefore, in the event that the appeal as of right were to succeed, difficulties would probably attend the recovery by the claimant of any sum paid to the first opponent pursuant to the judgment. The result is that, being without proper evidence but desirous of protecting the position of this claimant for a very short time so that such evidence may be placed before the Court, I am minded to give a stay. But upon clearly defined terms. The stay will be provided until Monday 9 September 1991 at 4 pm or until further or other order of this Court. It will be upon the basis that the claimant, by its counsel, undertakes to file all affidavits which will be used in support of the motion by Thursday 5 September 1991 at 4 pm and to have the same served upon the solicitors for the opponent, by that time. It will also be required to pay the costs of the first opponent (the only opponent which appeared before me today) upon a solicitor and client basis. I make the special order in relation to costs as a mark of the disapproval of the delays which have occurred. Those delays have occasioned the need for an extraordinary order to be made to protect the claimant as a public company, so that proper evidence may be put before the Court, to be determined on its merits next Monday. Had the appeal been properly pursued and the stay earlier sought the extraordinary, three-fold proceedings in the Supreme Court and Court of Appeal today would have been avoided. I record the fact that the claimant by its counsel has offered to the Court an undertaking to provide a second mortgage in favour of the first opponent upon certain, as yet unidentified, real estate in which, it is said, the claimant, or someone associated with the claimant, has an equitable interest of about $375,000. I reserve the need for such an undertaking to be further explored by the Court dealing with the matter upon the return of the motion on Monday next. (The undertaking was given) I order that the execution of the judgment of Brownie J in the Commercial Division of the Supreme Court in proceedings number 50429/80 be stayed until 4 pm on Monday 9 September 1991, or until any further or other order of a Judge of Appeal or of the Court and that the claimant pay the opponent's costs of this motion on a solicitor and client basis. The transcript will be taken out and will be available either to the Judge dealing with the motion list on Monday or available to the Court. Counsel for Claimant: JT Svehla Solicitors for Claimant: Nugent Wallman and Carter Counsel for First Opponent: PM Wood Solicitors for First Opponent: Uther Webster and James Counsel for Second Opponent: No appearance Solicitors for Second Opponent: No Appearance