STONE v FARROW MORTGAGE SERVICES (IN LIQUIDATION) [1998] NSWCA 217

STONE v FARROW MORTGAGE SERVICES (IN LIQUIDATION) SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

BEAZLEY JA 23 February 1998

[1998] NSWCA 217

Beazley JA This is an application for a stay of the judgment and orders of Bainton J of 23 May 1997. In that judgment his Honour ordered that there would be judgment for the respondent/opponent in a sum in excess of $1.7 million. The judgment debt arose out of loans which the respondent/opponent, Farrow Mortgage Services Pty Ltd (in liquidation) had made to the appellant/claimant, Mr Stone, commencing in about 1988, which loans were secured by mortgage.

Mr Stone has appealed against the judgment on a number of grounds, but relevantly for today's application, he attacks the judgment having regard to errors which he alleged the trial judge made in accepting the valuation evidence of the Farrow witnesses. The purpose of his attack on those witnesses is to show that the property which secured the mortgage was sold at an undervalue and that Farrow had thereby breached its duty as mortgagee.

As I have indicated during the course of the submissions made by each party in this matter, the trial judge considered the evidence adduced by both Mr Stone and by Farrow. He preferred the evidence of Farrow's witnesses, including their expert witnesses, over the evidence of Mr Stone himself and the evidence of Mr Stone's expert witnesses.

When this matter comes to hearing on appeal, should that occur, Mr Stone will be faced with the application of the principles enunciated in the High Court in Abalos v Australian Postal Commission (1990) 171 CLR 167 and later confirmed by that court in Devries v Australian National Railways Commission (1993) 177 CLR 472. He will face some difficulty in being able to prove that the trial judge erred in his preference of those witnesses unless he is able to demonstrate that the trial judge palpably misused the advantage which he had in preferring the evidence of Farrow's witnesses. There is nothing in the material which Mr Stone has presented to the Court today, nor on the face of the judgment, which demonstrates that he is likely to be able to do that. It is difficult to see, therefore, that the appeal has much of a prospect of success, and that is a very telling reason why a stay ought not to be granted.