Hewitt v McKensey [2008] NSWCA 45

New South Wales Court of Appeal

CITATION: Hewitt v McKensey [2008] NSWCA 45

HEARING DATE(S): 17 March 2008

JUDGMENT DATE: 17 March 2008

JUDGMENT OF: Hodgson JA

EX TEMPORE JUDGMENT DATE: 17 March 2008

I stay the orders of Justice Windeyer made on 29 August 2007 in Supreme Court proceedings 1585 of 1995 to the extent that they exceed $100,000 until the appeal has been determined, with the intent that the respondents should be entitled to enforce the judgment for $546,163 up to the extent of $100,000. DECISION: I order that interest accrue on such costs as the respondents may be entitled to in relation to the costs at first instance, such interest to accrue at Supreme Court rates during the period of the stay. I order that the costs of this application be costs in the appeal.

CATCHWORDS: PROCEDURE – Stay pending appeal.

CATEGORY: Procedural and other rulings

PARTIES: Christopher Michael HEWITT (Appellant) Hugh Stanley McKENSEY, Victor John LEWIS, Peter Charles HICKS (Respondents)

FILE NUMBER(S): CA 40646/06

COUNSEL: M ASHHURST SC (Appellant) T ALEXIS SC (Respondents)

SOLICITORS: Hewitts Commercial Lawyers (Appellant) Harris Wheeler Lawyers (Respondent

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S): SC 1585/95

LOWER COURT JUDICIAL OFFICER: Windeyer J

LOWER COURT DATE OF DECISION: 24 August 2007 and 29 August 2007

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 48631/07

HODGSON JA

Monday 17 MARCH 2008 Christopher Michael HEWITT v Hugh Stanley McKENSEY Judgment 1 HIS HONOUR: I am dealing with a notice of motion for a stay of orders made by Justice Windeyer on 29 August 2007. On that day, the primary judge made certain declarations, but also ordered the entry of judgment for the respondents against the appellant in the sum of $456,163. The primary judge also ordered that the appellant pay the respondent's costs of a notice of motion. The evidence before me suggests that those costs might be substantial. 2 It is put for the appellant that there are reasonable grounds for the appeal and that a stay should be granted because, in substance, failure to do so would mean that the appeal could not proceed. The appellant says he is unable to pay the amount of the judgment, that a bankruptcy notice has been served on him, and that if he is not granted a stay he will be made bankrupt and will be unable to prosecute the appeal. 3 However, the appellant, it would seem, concedes that even if he is successful in the appeal, he will still owe the plaintiffs something like $125,000. He claims, however, that if he is successful in the appeal he will probably get a costs order in his favour in relation to the proceedings before Justice Windeyer because, if he is successful on appeal, he will have, in substance, succeeded on the issues actually contested before Justice Windeyer. 4 He has led some evidence to the effect that in respect of the proceedings before Justice Windeyer, he is liable for costs of around $217,000 and has paid in addition another $10,000 to counsel. He has led some evidence that on taxation those costs may be of the order of $135,000. 5 Mr Alexis for the respondent has submitted that for a two or three day hearing, costs of that order seem greatly excessive. He has also submitted that, having regard to the issues actually contested before the primary judge, the best the appellant could hope to achieve would be to bring the debt down to something of the order of $200,000. 6 It is not possible for me to come to a final view as to the merits of these rival contentions, but it seems to me to be unlikely in the extreme that the appellant will succeed to an extent that would put his net liability at anything less than $100,000 after taking into account any claim that he might have for costs. However, he has an arguable appeal in respect some of the amount owing and a bankruptcy could stifle the appeal. 7 In those circumstances, it seems to me appropriate to grant a stay of the judgment insofar as it exceeds the sum of $100,000, but as a condition of the stay to order that interest should accrue on any costs awarded in favour of the respondents, such interest to accrue during the operation of any stay. 8 I stay the orders of Justice Windeyer made on 29 August 2007 in Supreme Court proceedings 1585 of 1995 to the extent that they exceed $100,000 until the appeal has been determined, with the intent that the respondents should be entitled to enforce the judgment for $546,163 up to the extent of $100,000. 9 I order that interest accrue on such costs as the respondents may be entitled to in relation to the costs at first instance, such interest to accrue at Supreme Court rates during the period of the stay. 10 I order that the costs of this application be costs in the appeal.