NRMA INSURANCE LIMITED v TOMPSETT SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SHELLER JA 26 October 1998 [1998] NSWCA 164 SHELLER JA On 28 August 1998 Acting District Court Judge Maxwell, gave judgments in favour of the plaintiff, Nicholas Steven Tompsett, in proceedings brought by him against NRMA Insurance Ltd for damages for alleged breaches of two insurance policies issued by it in relation to the plaintiffs premises at 8 Kyong Avenue, Bluff Point. The defendant's principal defence to the claim was based upon allegations of arson fraud which failed. The amount of the judgment was $108,000. The defendant has filed a notice of appeal without appointment and now applies by notice of motion that execution of the judgment be stayed pending the hearing of the appeal. That application was supported by the affidavit of Vicki Lynne Crawshaw of 14 October 1998. The claimants also relied upon an affidavit of 23 October 1998, filed by the defendant/opponent. In that affidavit, Mr Tompsett deposed to the fact that he sold the land at 8 Kyong Avenue for $150,000 of which, on settlement, he paid some $107,000 to the ANZ Bank Ltd to discharge his home loan and overdraft. He says that during the term of that loan, he made payments in accordance with its terms from his police service pension. At present his assets consist of $21,000 remaining from the sale. He says that he has recently received an assessment from the Australian Taxation office for approximately $15,000 which he will pay shortly. He has no other liabilities. He lives at the house of a friend. He is in receipt of a police service pension of $1,100 gross per fortnight. He says that he proposes to use part of the judgment sum to finance the commencement of a fly fishing tackle retail business. Mr Duncan appeared for the claimant on this application and Mr Sleight for the opponent. Both have laid some emphasis upon the chances of success of this appeal. Mr Duncan submits that the trial was handled in a rather unusual fashion in the sense that a number of documents were tendered on behalf of the plaintiff and admitted as truth of their contents which should not have been so admitted and that his Honour entertained what was described as a no case to answer claim by the plaintiff at the close of the defendants case. On the other hand, Mr Sleight submits that the appeal has little if any chance of succeeding because in substance his Honour rejected the evidence and the inferences from the evidence in support of the case of arson fraud that the defendant wished to make. It is, of course, true that an arson fraud case is not an easy one to make out both because of the level of satisfaction of evidence required and also because of the difficulties involved in evidencing such a claim. A significant matter was that the plaintiff was not called to give oral evidence on his own behalf. In Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685, the Court set out the principles governing stay applications. It is important in approaching this matter that the outcome of it be as fair as it is possible to be to both parties. The Court has a discretion whether or not to grant a stay on terms 2 UNREPORTED JUDGMENTS that would be fair and must weigh considerations such as the balance of convenience and the competing rights of the parties. Two principles are mentioned at 695, the first is that where there is a risk that the appeal would be aborted if the appellant succeeds and a stay is not granted, courts will normally exercise their discretion in favour of granting a stay. If it is apparent that unless a stay is granted an appeal will be rendered nugatory, this will be a substantial factor in the granting of a stay. Secondly, although courts will generally not speculate about the prospects of success because arguments concerning the success of appeal are necessarily attenuated, they will consider the necessary terms of a stay that will be appropriate fairly to adjust the interests of the parties not refrain from making some preliminary assessment about whether the appellant has an arguable case. On my understanding of this appeal at the present time, I am satisfied that the appellant has an arguable case. I say that on merely looking through the judgment and being taken to the grounds of appeal that it is proposed to rely on. It seems to me that if a stay is not granted and if the appeal ultimately succeeds, the assets disclosed by the plaintiff would indicate a risk of some dimension that the appeal will be rendered nugatory. Mr Duncan, on behalf of his client, has indicated that if a stay is granted, his client is prepared to pay a lump sum of $30,000 to the plaintiff on account of the judgment. In the circumstances, I am satisfied that this is an appropriate case in which there should be a stay of the execution of the judgment until the appeal is disposed of by this Court or further order; that the grant of that stay be conditional upon the defendant paying to the plaintiff, the amount of $30,000 within fourteen days and that the costs of this application be costs in the appeal. [Discussion regarding costs] On the question of the costs of this application, I was taken to two letters, one of 28 September 1998, from the defendant's solicitors to the plaintiffs solicitors and a letter in reply of 29 September 1998. Mr Sleight, has pointed to the notice of motion, order 3 of which was that the claimants would pay the opponents costs of and incidental to the notice of motion. On that basis, Mr Sleight asked that his clients have the costs of a notice of motion. However, in my opinion, this was a notice of motion that was defended and it has, in substance, succeeded. In the circumstances, in my opinion, the appropriate order is that the costs be costs in the appeal. The orders I make therefore are: 1. That upon condition that the defendant, NRMA Insurance Ltd, pay to the plaintiff, Nicholas Steven Tompsett, the amount of $30,000 within fourteen days, the execution of the judgments entered on 28 August 1998 in the District Court in No 3503 of 1997 be stayed pending the disposal of the appeal. 2. The costs of this application will be costs in the appeal.