Visnic v Sywak & Ors [2007] NSWSC 823

New South Wales Supreme Court

CITATION : Visnic v Sywak & Ors [2007] NSWSC 823

HEARING DATE(S) : 3 July 2007

JUDGMENT DATE : 3 July 2007

JURISDICTION : Equity Division

JUDGMENT OF : Brereton J

EX TEMPORE JUDGMENT DATE : 3 July 2007

DECISION : Extend time to file notice of appeal

CATCHWORDS : PROCEDURE – Stay of execution – pending appeal – in winding up proceedings – applicable test

LEGISLATION CITED : (CTH) Corporations Act 2001, s 482 (NSW) Supreme Court Rules 1970, Pt 44 r 5

Abalos v Australian Postal Commission (1990) 171 CLR 167 Alexander v Cambridge Credit Corporation Ltd [1985] 2 NSWLR 685 CASES CITED : Kalifair Pty Ltd v Digi-Tech (Australia) Ltd (2002) 55 NSWLR 737 Masri Apartments Pty Limited (In Liquidation) & Anor v Perpetual Nominees Limited [2004] NSWCA 255 Re A & BC Chewing Gum Ltd; Chewing Gum Inc v Coakley [1975] 1 All ER 1017

Milan Visnic (plaintiff) Peter Orest Sywak (first defendant) PARTIES : Adellos Pty Limited (second defendant) Parlamartu Pty Limited (third defendant) Castlove Pty Limited (fourth defendant) Donovi Pty Limited (fifth defendant)

FILE NUMBER(S) : SC 1278/03

COUNSEL : Mr D Price (plaintiff) Mr J M White (defendants)

SOLICITORS : Thomson Playford (plaintiff) Cosoff Cudmore Knox (defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BRERETON J

Tuesday, 3 July 2007

1278/03 Milan Visnic v Peter Sywak & 4 Ors JUDGMENT (ex tempore) 1 HIS HONOUR: On 15 June 2007 I pronounced orders which included declarations as to the plaintiff's entitlement to shareholdings in the second, third, fourth and fifth defendants, orders for the transfer to the plaintiff by the first defendant of certain of the shares held by the first defendant in Adellos and Parlamartu, an order for the rectification of the registers of each of the corporate defendants, and an order that the corporate defendants be wound up on the just and equitable ground, and that Michael Gregory Jones, who until that point was the provisional liquidator of the corporate defendants, be appointed their liquidator. I made those orders in the context of delivering oral reasons, which I explained was a summary of my reasons, over a period of 40 minutes on the afternoon of 15 June, indicating that I would deliver my full reasons in due course. When those orders were pronounced on 15 June, no application was then made for a stay in respect of any of them. Today I have published my full reasons and counsel for the defendants has applied for a stay in respect of the orders made on 15 June. 2 In the course of argument it has become apparent that the principal concern of the defendants is the winding up order and, in turn, that underlying that concern is the fear that real property held by two of the corporate defendants may be sold by the liquidator if there is not a stay. The application this morning is made without Notice of Motion, without affidavit, without evidence and without any draft notice of appeal. 3 I feel I must record, because of the force with which the argument that the defendants should have time to consider the reasons published this morning has been pressed, that if that were so, then to go through the exercise of providing a summary of my reasons on 15 June was a complete waste of time. I might as well have not done it at all if the defendants were going to sit on their hands and wait until the full published reasons were provided before considering what grounds of appeal they might have. 4 It is unclear as to what extent certain of the orders made on 15 June have been implemented. Counsel for the plaintiff alleges; but counsel for the defendants denies that the order for the transfer of shares in Adellos has been implemented; neither produces any evidence which enables those assertions to be resolved. Counsel for the plaintiff asserts, and counsel for the defendant does not know whether, the order for rectification of the registers of the corporate defendants has been implemented. There is, of course, no utility in making an order staying the implementation of an order that has already been implemented. 5 It has been submitted for the plaintiff that there is no power to stay a winding up and that the winding up order puts the company into liquidation and is then beyond recall. This submission is wrong. In Masri Apartments Pty Limited (In Liquidation) & Anor v Perpetual Nominees Limited [2004] NSWCA 255 Ipp JA considered the power to stay a winding up order pending appeal and the relationship between (CTH) Corporations Act 2001, s 482, and former (NSW) Supreme Court Rules 1970, Pt 44 r 5, which provides that the Court may, on terms, stay execution of a judgment or order. His Honour concluded that an application for a stay of a winding up order pending appeal was governed by the Supreme Court Rules and not by Corporations Act, s 482, and, accordingly, that there was power to stay such an order under the Rules, and the applicable test was not that which applied to s 482, but that articulated in such cases as Alexander v Cambridge Credit Corporation Ltd [1985] 2 NSWLR 685 and Kalifair Pty Ltd v Digi-Tech (Australia) Ltd (2002) 55 NSWLR 737, in which it was said (at 741): The appellant must show that the appeal raises serious issues for the determination of the appellate court, and that there is a real risk that he will suffer prejudice or damage, if a stay is not granted, which will not be redressed by a successful appeal. This requirement will be satisfied if the appeal will be rendered abortive or nugatory unless a stay is granted. If these pre-conditions are established the Court will then consider the balance of convenience.