WEST WERRIBEE PTY LIMITED v AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL MAHONEY P 13 November 1996 [1996] NSWCA 554 Mahoney P. This application comes before the Court in somewhat unusual circumstances. At approximately 3.30 pm this afternoon, Wednesday, 13 November 1996, application was made to the Court for the hearing of, I shall describe it compendiously, an application to stay the execution of a judgment and a writ of possession which has been issued pursuant to the judgment. In the circumstances, the Court having been informed that the writ was to be executed tomorrow 14 November 1996, the matter was heard as a matter of urgency at or about 4 pm this afternoon. The nature of the applications and the material urged in support of it are not all that clear. I say that not by way of criticism of counsel involved, but because of his answers with engaging frankness to cross-examination of him by me. I say what I have said in order to indicate that I am taking the information, which I shall record, from what has been said and from the papers insofar as they are before the Court. (Itmay be that in respect of some items of detail it will be necessary for corrections to be made to what I say). The matter arises, it would appear, by reason of a transaction or series of transactions which took place in early 1988. The land in question had, I am informed, for a long time been owned by the two claimant companies. In early 1988 it appears that there was a transaction or transactions which resulted in the present shareholders in these companies purchasing the shares in the companies, therefore becoming effectively beneficial owners of the companies and accordingly of the land in question. In connection with that transaction or transactions the respondent bank, the Australia and New Zealand Banking Group Ltd, advanced moneys, or presumably advanced moneys, to the present shareholders for the purchase of the shares with a view to enabling them to pay the then holders of the shares the price they required for the shares. I infer from what has been said that those moneys were paid by the shareholder purchasers to the share vendors and that the share vendors have taken the money and used it for their own purposes. There is, it is said, no prospect of that money being recovered. The security given for the moneys advanced included a registered mortgage by the companies over the lands in question. It appears that the indebtedness of the companies, over whose land the mortgages or securities have been registered, or other their obligations to the bank, have not been met. As a result the bank brought proceedings in the Common Law Division for the recovery of the moneys owing and for other relief. In the proceedings, as I am told, a defence and cross-claim was filed on behalf of the companies. That defence and cross-claim related to matters of representations which are not now relevant. 2 UNREPORTED JUDGMENTS It appears that on 15 August 1995 as the result of an application for summary judgment Master Malpass made an order that the defendants" defence and cross-claim be struck out and that the plaintiff bank have summary judgment. Judgment was entered on 2 November 1995 for, as it would appear, the sum of $3,818,119.78. That judgment was to take effect from 23 August 1995. The companies then brought the matters presumably by way of appeal or review before a Justice of the Supreme Court, Dowd J. As I understand the material now before the Court, his Honour dismissed the appeal. In the course of the dismissal of the appeal he gave a judgment dated 3 October 1996, a copy of which is before me, and is placed with the court papers. In the course of that judgment his Honour made remarks, a version of which appears in par 6 under the heading 'Nature of the Case' in the summons which has been propounded by the applicants and which they propose to file in amended form as a summons for leave to appeal in relation to this particular matter. It is said that in the course of his judgment on 3 October 1996 his Honour said this: It seems to me that some short time should be allowed in order that the defendants be entitled to be heard in relation to their notice of motion and the proposed amended cross-claim and any subsequent argument as to a stay. However, in view of the lapse of time since 28 August 1996, and in order to prevent unnecessary approaches to a duty judge for a stay of the writ of possession, I believe that a short period for a stay should be provided for the defendants to take such action as they may be advised. The draft summons states that on 9 October 1996 the companies filed a notice of motion to this effect. The notice of motion was returnable before Dowd J on 21 October 1996. His Honour heard argument for some two days in relation to that motion and on 30 October 1996 he dismissed the motion. When he dismissed the motion his Honour did not deliver reasons. I do not know whether it was necessary for him to do so,having regard to the nature of the application, but the draft summons claims that his Honour then indicated that he would that afternoon or the next morning deliver reasons for the dismissal of the application. For reasons which do not appear, his Honour has not yet given reasons for the dismissal of the notice of motion, the order that he made on 30 October 1996. The draft summons which is now before me purports to be or will be in its amended form a summons seeking leave to appeal against, as it is has been described, the order of 30 October 1996 dismissing the claimants" further amended notice of motion. As I understand the position, what was envisaged on behalf of the companies was this. It is said that there is a defence and the basis of a cross-claim quite different from those which had been set up in the original proceedings. Counsel for the companies has explained to me briefly, again as a result of my questions in cross-examination of him, that the contention is that when the moneys were advanced by the bank and the transaction took place in early 1988 there was a breach of, as they then were, the provisions of s 129 of the Corporations Law. Counsel has informed me that steps were taken in an endeavour to comply with the terms of the law in that regard. It is said that a shareholders" meeting was held and a resolution was passed directed to that end. However, it is said, what was done was not legally effective to avoid the prohibition contained in the section because documents were not lodged with the Corporate Affairs WWSST WERRIBEE PTY LIMITED v AUSTRALIA AND NEW ZEALAND BANKING GROUB LTD (Mahoney P) Commission as they should have been, and because there was some defect in the description of what was to be done or in some other aspect of the documents in question. It is sought to set up these matters as a defence or as the basis of a cross-claim in relation to the moneys which were advanced and, as I infer, the mortgage securities which were given to the bank. Those securities were subsequently registered. It is that which is apparently sought to be set up by way of defence and cross-claim and it is to this that the application of 30 October 1996 appears to have been directed. I should pause at this stage to interpolate that at an earlier state other applications were made in relation to the original proceeding and the order of Master Malpass giving summary judgment for the bank and striking out the original defence and cross-claim. Reference has been made in the judgment of Dowd J of 30 October 1996 to a proceeding before Master Greenwood which apparently ended against the interests of the companies. It appears also that an application for leave to appeal against the dismissal of the companies" original appeals to the judge against entry of summary judgment was dismissed by this Court. What apparently is now in question is therefore an application for leave to appeal against an order of 30 October 1996, the precise terms of which do not clearly appear. The only ground in the document on which leave to appeal is sought is that his Honour has failed to give reasons for what he then did and that he has 'thwarted any appeal' and 'there may not necessarily be one'. Counsel for the companies has urged that it is not practicable to give any other reasons in support of the application for leave to appeal because it is not known whether, in dismissing the application on 30 October 1996, his Honour was right or wrong. Counsel has, again with engaging frankness, confessed the possibility that the judge may in fact have been right in what he did. At least that is the basis upon which he has said what he said. This being so, the present application before me is for a stay of execution upon the writ for possession which has been issued pursuant to the judgment which, as I am informed, has long since been entered. This matter may fairly be described as a discretionary matter. Whether the stay should be granted against the execution of the writ and execution issued as long ago as 3 October 1996 is, to say the least, a matter engaging the discretion of this Court. In all the circumstances, I do not think that a case for staying the execution of the writ has been made out. It is not necessary for me to engage in a long statement of reasons. It is sufficient that I say that I am not satisfied that there has upon thematerial before me been shown even an arguable case. If an application is to be made for a stay of execution of the judgment which presently has been entered, one would think that there would be in the evidence something to establish a substantial right in the companies, a right which would be apt — I use that term in the sense here appropriate — to found an application for setting aside the judgment which has been obtained and consequently the writ for possession. But there is nothing before me which would establish any such substantial rights. The assumption appears to have been made that because the judge has, for reasons which do not appear, not yet issued reasons for what was done on 30 October 1996, that that provides a basis for staying execution upon a judgment that (apparently) has been entered and (apparently) regularly entered. I need only say that I am not satisfied that that is a proper basis for an application of this kind. 4 UNREPORTED JUDGMENTS I have not attempted to spell out all of the relevant considerations. It is sufficient that in the context which I have outlined I indicate my opinion that this is not a case in which, were documents properly put before the court, I would grant a stay of execution of the writ in question. The application therefore is dismissed. I think I should have from the claimants an undertaking to file the draft summons which has been referred to and the notice of motion so that there may be on the court record the proper documents which I have assumed would have based the application which has been made before me. PERRAM: I give that undertaking. (Counsel addressed on the questions of costs) HIS HONOUR: I note the application is dismissed with costs. A transcript of what has occurred today will be taken out and placed with the papers so that there will be an appropriate record of what has taken place. Orders accordingly.