NARHEX AUSTRALIA PTY LIMITED vy TELEMARKETING AUSTRALIA PTY LIMITED SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL PRIESTLEY JA 10 February 1995 [1995] NSWCA 306 Priestley JA. On 18 November 1994 his Honour Judge Patten of the District Court gave judgment in favour of Telemarketing Australia Pty Limited (T) against Narhex Australia Pty Limited (N) in the sum of $194,788.56. N lodged a notice of appeal and applied for the judgment to be stayed pending the appeal. The application came before me. When it began application was made for leave to amend the notice of appeal. Leave was granted. The amended notice should be filed within seven days from today. Voluminous material was put in evidence, including the transcript of evidence before Patten DCJ and his reasons for decision. One item tendered before me by N, called PS1, was tendered only on a basis not agreed to by T. I do not think it should be admitted on the basis sought by N, and therefore reject the tender. I have considered all the other material. From the material it appeared that T performed services for N in 1988 and that N complained that T never provided proper substantiation of the charges it made. T began proceedings in the District Court in 1988 claiming payment. N paid $66,311.86 into Court on 4 May 1989. The matter was in 1993 referred to an Arbitrator, who, on 5 January 1994, made an award in favour of T against N in the sum of $61,735.31. He refused T's claim for interest on this sum. The case was re-heard before Patten DCJ. It was contested, in substance, only as to amount. T was put to proof of the work done and the charges for it. Patten DCJ found that the appropriate charge for the work done had been $81,238.85. As to interest, he found that N had agreed to a rate of.06 per cent per day on amounts unpaid 21 days from date of invoice and that N should pay such interest which amounted to $113,549.71. The primary reasons advanced by N why a stay should be granted are that T served a Creditor's Statutory Demand for Payment under the Corporations Law upon N on 29 November 1994 and N wishes its appeal to be heard without the threat of winding up proceedings hanging over it, and that there is evidence which suggests if the judgment sum is paid to T before the appeal is heard and if the appeal then succeeds, T will not be able to repay out of its own resources the judgment sum received by it. T, in its turn, claims that N's financial position is deteriorating, and it should not be held further out of money due to it since 1988. N has offered security, on a qualified basis, if a stay is granted. The application is one which, to my mind, can be dealt with without coming to any final conclusions about the financial position of the parties, because some aspects of the case are sufficiently clear to enable the formulation of conditions which are reasonably fair to be imposed upon N as the price for obtaining its stay. 2 UNREPORTED JUDGMENTS The principal issues at the trial were the questions of the amount owing by N to T for services undoubtedly performed and whether interest should be paid on the amount found by the court to have been owing and if so at what rate. Having looked at the materials in evidence before me my opinion is that the chances of N on appeal reducing the amount of the debt for the services done for it in 1988 below $66,000 are so slim as to make it fair and proper to impose as one condition of granting the stay a requirement that $66,000 be paid by N to T within 21 days of the granting of the stay. In saying this I indicate no opinion, one way or the other, of the chance that N might obtain any reduction at all of the amount arrived at by Patten DCJ. In regard to interest, there seems to me to be more room for argument, and I have not attempted to foresee whether some precise result on the various possibilities is reasonably predictable. I am however left with the distinct impression that it is at least more probable than not that the interest component of the District Court judgment sum will not be reduced on appeal below $50,000. I think this impression is probably generous to N. I therefore think that an appropriate second condition for the granting of the stay is that security be provided for payment of all or part of any judgment against N in favour of T at the conclusion of the proceedings in the Court of Appeal in the sum of $50,000. I will leave it to the parties to agree on the form of this security. The two foregoing conditions go further than any offer of security made by N. As to security for the balance of the judgment sum, I think it will be sufficient to require N to comply with the following: to provide, within 21 days of the granting of the stay, (i) a floating charge over all the assets of the company; (ii) an undertaking not to deal with the company stock except inthe normal course of business; (iii) an undertaking to advise T forthwith should the wholesale value of the stock fall below a figure of half a million dollars. The requirements in the preceding paragraph are an adaptation of part of N's offer. The conditions I propose do not require any security for costs of the proceedings in the District Court and in this court. order a stay, starting now and to continue until further order, of T's judgment against N, on condition that the above requirements are met within 21 days of today. If T wishes to contend, when the 21 days are up, that the requirements have not been met within that time, then liberty is reserved to apply to this court on two days notice for a declaration to that effect and for consequential orders. In case there is any difficulty in engrossing or implementing the above orders, I stand this notice of motion over for fourteen days, to 9.30 am, 24 February 1995. If the parties have not by that day been able to agree on the security for $50,000 referred to in the second condition of granting the stay, I will decide on that day whether any further and if so what order should be made concerning that matter. If there is to be an argument about it, any materials upon which either party wishes to rely should be filed no later than 2 pm 23 February 1995. I was also asked to make an order for expedition of the hearing of the appeal. The case is like most appeals to this court in that expedition is desirable. The volume of appeals makes it impossible to grant expedition to all applicants. An additional factor in the present case is the health of Mr McInerney, T's managing director. The evidence of Mr McInerney's health was brought up to date before me by the tender of two medical reports which became exhibits which I have since caused to be marked 'C' and 'D'. WRARHEX AUSTRALIA PTY LIMITED v TELEMARKETING AUSTRALIA PTY LIMITER (Priestley JA) Because of this extra consideration I order that the hearing of the appeal be expedited. Ihave not heard argument concerning the costs of the applications before me. Any argument about costs can be decided on 24 February next. In the event there is to be argument, written submissions concerning the argument, which in the nature of things should not be anything other than brief, should be filed no later than 2 pm 23 February 1995. Orders accordingly.