DINDORI HOLDINGS PTY LTD v INTERNATIONAL RIGGING AUSTRALIA PTY LTD SUPREME COURT OF NEW SOUTH WALES MAHONEY JA 21 October 1991 [1991] NSWCA 78 Mahoney JA This is an application for the stay of an order made by Cole J on or about 2 August 1991. His Honour, the Court is informed, confirmed the award or findings of a referee in relation to a dispute between the parties concerning a building project. The Court is informed that the effect of the confirmation is that the finding of the referee takes effect as a judgment of the Court and in order to determine whether the stay should be granted, it is relevant for the Court to have regard, inter alia, to the substance of the appeal and to the protection of the parties pending the determination of the appeal. The Notice of Appeal which has been filed has only one ground. That is in the following terms: "That his Honour erred in confirming the finding of Mr Referee B McGregor QC that there exists between the parties a concluded agreement." That ground of appeal is, to put the matter shortly, singularly unforthcoming and it is not possible to judge from the terms of that ground, whether the appeal is a bona fide appeal or whether it has a reasonable prospect of success. Mr Ryan for the applicant, having had his attention drawn to this matter, would propose to seek an amendment to the ground of appeal in order to make clear the precise matters that are in question and no doubt if the appeal proceeds that will be done. I shall proceed upon the basis that some appropriate form of appeal will be formulated to indicate that the appeal has in form a reasonable chance of success. It has not been suggested in terms that the appeal is not bona fide. But Mr Ellicott has properly pointed out, although there is no material before the Court on which to deal with these matters, that in his client's view, there may well be little prospect of the appeal succeeding. I come to the second matter, namely that of the protection of the parties pending the appeal. Ordinarily if proper security is given for the judgment which has been awarded against a party, that is an important matter in determining whether a stay should be granted. In the present case, various forms of security have been offered for the claimant. In paraS of the affidavit of Constance Cheng of 18 September 1991, it is said that, as a condition of the grant of the stay, the claimant is prepared to provide a bank guarantee in the sum of $153,409.62 to be held by the Registrar of the Court of Appeal pending determination of the appeal. Reference is made to correspondence in relation to that matter. When the matter was previously before the Court, before another judge, there were offers and counter offers as to other forms of security. Mr Ellicott has handed up a form of offer which his client would be prepared to accept relating 2 UNREPORTED JUDGMENTS to the payment of a sum of $133,399.67 into a form of joint account. Mr Ryan has on the other hand proffered a form of security of another kind. In my opinion it is not necessary or appropriate for this Court to attempt to decide, on an application of this kind, the precise operation of the bankruptcy law or the company winding up provisions if proper security is given. Each party contends about the other that the other is in a parlous financial state and that there is a real prospect of the other going into liquidation or otherwise ceasing to carry on business in the ordinary way. There are before the Court in respect of the two companies, accounts indicating that neither is - I speak in general terms and without making any judgment upon the matter - in a strong financial position. As I have said, I do not think that, on an application such as this, the Court can say whether the provision of a particular form of security will constitute a preference or the like. I think it is sufficient to indicate that, in the circumstances, it is appropriate to grant a stay of proceedings upon his Honour's order until determination of the appeal or further order, provided that appropriate security is given. By appropriate security I mean security to the satisfaction of the Registrar. I indicate for this purpose that security will be satisfactory for the purpose if it is security for the amount of the judgment and for the interest which will be payable upon the judgment in accordance with the ordinary Court rules and procedures during the period of one year from the date of his Honour's order. That will allow appropriate time for the parties to prepare the appeal for hearing and, if diligence is exercised, hopefully to have the appeal disposed of. For this purpose security which would be satisfactory, and which the Registrar may accept as satisfactory, would include a bank guarantee by an appropriate bank to cover the particular amount in question and the costs of the appeal upon an assessment to be made for that purpose by the Registrar. I indicate also that it would in my opinion be appropriate for the Registrar to accept by way of security, and of course in place of the security by way of bank guarantee, either an undertaking of the form proffered by Mr Ellicott or one proffered by Mr Ryan, if agreed upon by the other party. In other words, if the parties agree upon another form of security for the purpose, then the Registrar may in my view properly accept that security for the purposes of this order. If the parties are not able to agree upon an appropriate form of order, then the security should be by way of a bank guarantee of the kind to which I have referred. Costs of the present application will be costs of the appeal. The security should be given within fourteen days of today.