FAIREY v FAIREY (Eq No 1177/96); FAIREY v FAIREY (CA 40780/98) SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL GILES JA 9 December 1998 [1998] NSWCA 279 Giles JA. On 14 September 1998 Santow J delivered judgment in these proceedings. His Honour held that a claim giving rise to equitable damages in relation to what has been called the house lot had been made out, and in due course orders were made whereby the defendant was ordered to pay to the plaintiff approximately $97,000, being the damages plus interest, and to pay the plaintiff's costs. Orders were also made disposing of a cross-claim and for the costs of the cross-claim. The defendant appealed, filing a notice of appeal without appointment on 9 October 1998. The plaintiff took steps to execute the judgment for the $97,000. The defendant then moved by notice of motion filed on 13 November 1998 for relief of two kinds, first, discharge of an order made in May 1998 restraining certain dealings with what has been called lot 1, and secondly, a stay of execution of the judgment for the approximately $97,000 and of the order for costs once the costs were assessed. The defendant's application came before Austin J. His Honour ordered, apparently pursuant to Pt 12 r 2 of the Rules, that the proceedings, or perhapssome part of the proceedings, be removed to the Court of Appeal. I doubt that that was appropriate. While in some circumstances it is appropriate to move the Court of Appeal for a stay of execution, the application had been made in the proceedings in the Equity Division, it was more than an application for a stay of execution, and it could have been dealt with in that Division. It is by no means clear to me that the purported removal to the Court of Appeal fell within Pt 12 r 2, and certainly his Honour did not state the question to be decided or address satisfaction that special circumstances existed. Had the defendant wished to move the Court of Appeal for a stay of execution an application in the appeal could have been made, but no such application was filed. I say this not as a preliminary to declining to do anything, as the matter has been debated and a result has been reached, but in order to convey, first, that I do not think things should have happened as they did, and secondly, that in making the orders which I will in due course make I should be regarded as wearing the hat of a judge in the Equity Division rather than a judge of the Court of Appeal. The order made in May 1998 was made by consent, at a time when the plaintiff put forward a claim to lot 1. At a later time the plaintiff abandoned the claim to lot 1. That was in essence the reason why the defendant said the order should be discharged, arguing that if it remained it would constitute something like a Mareva injunction without the plaintiff having made out the grounds for a Mareva injunction. The application for a stay of execution was, also in essence, on the ground that the defendant wished to have an orderly sale of lot 1 and of another property which has been called 31 Hillcrest, rather than a sale by the Sheriff on the application of the plaintiff. The defendant was willing to create a fund from the 2 UNREPORTED JUDGMENTS proceeds of sale, and so the application was for a stay of execution in the sense that it was accepted that there should be a fund and the question was how it should be created. For the plaintiff's part, while wishing to be free to execute thejudgment and so opposing the execution she proffered that the result of the execution coming to her hands would be held as a fund. This brought about the rather silly situation that the contention between the parties was really not one of discharge of the restraints of May 1998, and was really not one of stay of execution. Rather, the contention between the parties concerned whether the fund which both contemplated should be created pursuant to a sale under the control of the defendant of, amongst other properties, lot 1, or pursuant to the actions of the Sheriff. With a little judicial intervention, the parties came to agree that $250,000 would be an appropriate figure for the fund, but they were unable to agree on the timing of any sale, and despite what I have said about a rather silly situation, the plaintiff maintained her opposition to a stay of execution. With the diffidence attendant upon a necessarily impressionistic assessment, it seems to me that the defendant faces some difficulties in his appeal. His appeal on the merits would appear to require that findings of fact be overturned, his appeal in relation to costs would appear to require that exercises of discretion be overturned, and it is well-known that there are difficulties in both those areas. That was the foundation of the plaintiffs opposition to a stay of execution, but the present circumstances went beyond decisive influence of the prospects of the appeal. The plaintiff's position was not that execution was desired in order that she should immediately enjoy the fruits of the $97,000, or immediately have her costs. As I have said, she proffered the keeping of the judgment sum, plus an amount referable to costs, in a fund to await the outcome of the appeal. The prospects of the appeal, therefore, were of less significance, and the governing factor was whether justice between the parties would be best served by a forced sale or, subject to appropriate safeguards, an orderly sale, in order to create the fund. In my view, the latter is the case. Provided the plaintiff is appropriately protected by the maintenance of some restraint on dealing with not only lot 1, butalso 31 Hillcrest as the further source of the fund, and by requirements that within a defined time the fund be created, she will have appropriate protection and in substance all that she wanted. If that can be done without imposing on the defendant a forced sale, it should be done, and the defendant will have in substance all that he wanted. But the defendant cannot simply stand by and, having proffered a course of action whereby a fund is created, should be required to give undertakings to create the fund. The orders to which I will come are intended to have these effects. The plaintiff submitted that the Court should look askance at the prospect of the fund coming from lot 1 and 31 Hillcrest, suggesting that the defendant should be required to put more towards the creation of the fund and should be required to accede to restraint and give undertakings in relation to another property sufficiently identified as 31 York. The evidence was that the sale of lot 1 and 31 Hillcrest would be more than sufficient to provide a fund of $250,000. It was suggested that the Court should look askance at the prospect because it was only the defendant's say-so as to values and the defendant, so it was said, had not been forthcoming in the proceedings or in taking more prompt steps to meet the judgment. The evidence of value was by what might be called drive by valuations of estate agents. The evidence of present encumbrances came from the defendant. URJFAIREY v FAIREY (Eq No 1177/96); FAIREY v FAIREY (CA 40780/98) (Giles JA) 3 There was no reason for me to reject the evidence, or discount it to a stage such that a fund of $250,000 would not come about. I do not think that what the plaintiff said in this respect provides a reason against the course which I have indicated. The plaintiff then said that the defendant had had more than sufficient time to take steps to meet the judgment and should be required to create the fund by mid-February next year, rather than by the end of April as suggested on his behalf. Assuming that the defendant has not been as active as he could and should have been in the past, nonetheless mid-February is, on my estimation (and I use the word estimation advisedly because there is no evidence) too soona time to expect an orderly sale, and the end of April, according to the same estimation, is the more appropriate time. However, the orders will be such that it is incumbent on the defendant, if he has not been able to achieve a sale by the end of April, to take some other steps to provide the fund, whether from other resources or by obtaining some bridging finance using lot 1, 31 Hillcrest and even 31 York for that purpose. This will not cause an injustice to the plaintiff, as the plaintiff will be protected in the meantime and should have the fund to await the outcome of the appeal well before the appeal is likely to be disposed of. The views underlying what I have said were made known in the course of argument, and I am grateful to the legal representatives for their being able to arrive at some short minutes to translate them into orders. There was some discussion of variations made to the original draft short minutes, and pursuant to an enquiry from the defendant it was made plain that the undertaking which I have considered should form part of the scheme was an undertaking which extended to all the components of paragraph 2 of the short minutes. So far as the short minutes refer to agreement concerning withdrawal of the writ for levy of property, the agreement is consequent upon the other orders and in that sense, an enforced agreement in recognition of what flows from what I consider to be the appropriate course. Before making the orders I should record that in the course of argument the question was raised whether leave was required to bring the appeal. I express no view one way or the other on that matter, as to which the parties must take their respective own courses. Repeating that I make the orders in the proceedings in the Equity Division and wearing a hat as a judge of that Division, I make the orders in paragraphs 1, 2, 5 and 6 of the short minutes of order which I initial for identification and date today's date. I give the direction in paragraph 3 of those short minutes, and note the agreement recorded in paragraph 4 thereof. Subject to confirmation that the undertaking is given, I note the undertaking in paragraph 2A of those shortminutes. [The giving of the undertaking was confirmed.] Orders accordingly.