HOWELL v FINE REAL ESTATE NETWORK PTY LTD SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL MAHONEY P and Simos AJA 4 November 1996 [1996] NSWCA 257 Mahoney P. This is an application for stay of proceedings upon a judgment. The proceedings were proceedings relating, generally, to a real estate company, Fine Real Estate Network Pty Ltd That company sued the defendant, Mr Howell, and the other party, Mr Fine, was involved in the proceedings. Mr Fine's wife has become involved in the proceedings by reason of the interlocked financial arrangements between all of the parties. The proceedings were, as the Court had been informed, referred by Young J in the Equity Division to the determination of a referee. The referee, Mr Reynolds QC, prepared a report dated 6 March 1996; that report is before the Court. The report, a lengthy document of some 48 pages, detailed the financial arrangements between the parties and in the end indicated the referee's conclusion that the plaintiff, the company, was entitled to an award of $ 598,148. The referee's report came before McLelland CJ in Eq for adoption. On 19 August 1996, the Chief Judge came to the conclusion that, with some alterations, the report should be adopted. On30 August 1996, having heard further detailed argument in relation to the matter, the Chief Judge made the following orders: 1. The Court adopts the report of the referee dated 6 March 1996 subject to the variations referred to in the reasons for judgment delivered on 19 August 1996 and 30 August 1996. 2. The Court orders that the defendant pay to the plaintiff the sum (including interest to date) of $445,395.00. The Court orders that the cross-claim be dismissed. 4. The Court orders that the defendant (cross-claimant) pay to the plaintiff and the cross-defendants their costs of the proceedings (including the costs of the reference). Y An appeal has been lodged to this Court against the orders and judgment of the Chief Judge. The matter came before the Registrar, Mr Jupp, on 28 October 1996; at least, on that day he dismissed an application for stay of proceedings upon the judgment. I interpolate that it appears from the papers which are before the Court that when the matter came before McLelland CJ in Eq on 30 August 1996, his Honour considered whether an application for stay of proceedings upon his order should be granted. It would appear from the matter as it is in the transcript of what took place before the learned judge that his Honour did not in terms deal with the application for a stay but allowed the parties to make an application to this Court for a stay by this Court of the proceedings upon the judgment in question. That is the inference which I draw from the material as it has been placed before this Court. I refer to this matter because I note that it is, as I understand it, the practice of this Court that if an application for a stay has been made to a judge of a Division and that judge has considered the application and granted or refused the stay, 2 UNREPORTED JUDGMENTS when the matter comes before this Court for review in accordance with the existing principles, the practice of the Court is that the matter not be dealt with by the Registrar but be dealt with by a judge of this Court. It does not appear to have been indicated to the Registrar that, though an application was made to him, McLelland CJ in Eq actually made orders following a consideration of the matter such that the matter should not have been dealt with by the Registrar but should have been dealt with by this Court. Nothing turns upon the matter but it is proper that I record what, as I understand it, is the practice of this Court and the way in which the matter has been dealt with in the present case. I come back to the application for a stay of the orders and judgment of McLelland CJ in Eq The effect of the order so far as Mr Howell is concerned is that he is required to pay to the company, Fine Real Estate Network Pty Ltd, the sum of $445,395. Mr Coles QC for Mr Howell, the applicant in this application, has submitted that a stay should be granted. His submissions involve, as I understand them, substantially this: that there is an appeal before the Court; that it cannot be said of that appeal that it does not have a substantial or sufficient prospect of success; that in those circumstances it is the practice of the Court to exercise its discretion to grant a stay of proceedings upon a judgment to enable this Court to deal with the validity or propriety of the orders appealed against; and accordingly that a stay should be granted in this case. Mr Drummond, on the other hand, has submitted that there really is no prospect of success upon the appeal and that in any event in this case if the amounts in question under the judgment of McLelland CJ in Eq were paid to the company, that would not cause any relevant hardship if in the end the appeal were upheld and some other order were made. In relation to this, he points to the complicated financial relationships which have existed between Mr Howell on the one hand, Mr and Mrs Fine on the other hand, the company, the plaintiff in the present proceeding and their bankers, the Westpac Bank. There is before the Court a mass of evidence in relation to the various liabilities of the parties, one to the other. It is a criticism of the presentation of the case, thoughif I may say so, a mild criticism, that the precise and ultimate financial position does not appear on a piece of paper and placed before the Court. However, the Court is, by the argument, given to understand that the company is indebted to the Westpac Bank for substantial sums and that the obligations of the company have been guaranteed (I use the term generally and perhaps somewhat loosely) both by Mr and Mrs Fine and by Mr Howell. The Court has been given to understand that those guarantees or portions of them have been secured upon real estate owned by the parties. Reference has been made to the sale which is proposed to be effected in the immediate future of property owned by Mr Howell and to proceedings which have been taken by the bank against Mr and Mrs Fine upon their guarantees, as I have described them, of the obligations of the company. The thrust of the matter, or portion of the thrust of the matter, as put by Mr Drummond is this: that if the money payable by Mr Howell upon the present judgment is paid to the company and the company is subsequently held not entitled to that money, the company has financial rights against Mr Howell to such an extent that in any event, even if it were obliged to repay the amount in question to Mr Howell, Mr Howell would still be indebted to the company and accordingly there would be nothing to repay. URJ HOWELL v FINE REAL ESTATE NETWORK PTY LTD (Mahoney P) 3 As I have said the financial relationship between the parties is a complicated one. It is sufficient for me to say that, having heard what has been put and having read the material which has been placed before the Court, I am of the opinion that in the Court's discretion, this is not a case in which a stay should be granted. I think the financial relationships between the parties are such that notwithstanding the principles to which I have referred and what otherwise would be the application of them in the present case, in the end I do not think that it is appropriate that the proceedings upon the judgment be stayed. I do not in this indicate that there is no prospect of success upon the appeal. I do not attempt to quantify those prospects. I have in the end come to the conclusion that, even if there be an appropriately arguable case, in all the circumstances of the financial relationships between the parties, I think this is a case in which, in the special circumstances, this Court should allow the judgment to take effect. The proceedings can be dealt with appropriately by this Court in due course and appropriate orders can be made. I do not think that it is a proper case for the ordering of security for the amounts which should be paid to the company pursuant to the judgment. I would therefore propose that the present application be dismissed. It would appear appropriate that it be dismissed with costs. Simos AJA. I agree. Mahoney P. The orders of the Court are therefore as I have indicated. Orders accordingly.