Daquino v Kira Holdings Pty Ltd [2010] NSWCA 158

New South Wales Court of Appeal

CITATION: Daquino v Kira Holdings Pty Ltd [2010] NSWCA 158

HEARING DATE(S): 5 July 2010

JUDGMENT DATE: 5 July 2010

JUDGMENT OF: Campbell JA

EX TEMPORE JUDGMENT DATE: 5 July 2010

DECISION: Notice of Motion dismissed with costs.

CATCHWORDS: PROCEDURE - Supreme Court procedure - New South Wales - jurisdiction generally - stay of proceedings

LEGISLATION CITED: Civil Procedure Act 2005 Contracts Review Act 1980

CATEGORY: Procedural and other rulings

CASES CITED: Kira Holdings Pty Ltd v Daquino [2010] NSWSC 494

Marianina Daquino (Appellant) PARTIES: Kira Holdings Pty Ltd (First Respondent) Chipping Norton Sand & Soil Supply Pty Ltd (Second Respondent)

FILE NUMBER(S): CA 2009/290621

COUNSEL: CP Locke (Appellant) M Hamwood, solicitor (Respondents)

SOLICITORS: Argyle Lawyers Pty Ltd (Appellant) Thomson Playford Cutlers (Respondents)

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT JUDICIAL OFFICER: Brereton J

LOWER COURT DATE OF DECISION: 27 May 2010

LOWER COURT MEDIUM NEUTRAL CITATION: Kira Holdings Pty Ltd v Daquino [2010] NSWSC 494

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 2009/290621

CAMPBELL JA

5 JULY 2010 MARIANINA DAQUINO v KIRA HOLDINGS PTY LIMITED Judgment 1 CAMPBELL JA: Kira Pty Limited was a family company of a husband and wife, Mr and Mrs Daquino. As part of a divorce settlement deed entered between them in 1978 certain land owned by Kira came to be held on trust for the husband and wife. In 1992 there was a deed of family arrangement between them and some other members of their family which set out a procedure for development of the land. Broadly, the trial judge held that it operated so that a company called Chipping Norton Pty Ltd was to carry out the development at its own expense and pay a particular sum of money, approximately $3.74 million, to Kira. Chipping Norton would be entitled to keep the rest of the proceeds. The figure of $3.74 million was arrived at as being the then value of the land. 2 The development did not all proceed at once and by 2009 some of the land was still held by Kira. It had increased in value significantly since 1992. Mrs Daquino lodged a caveat in 2009 claiming an interest under the trust that related to the land. Kira began proceedings in the Equity Division, No 09/290621, seeking declarations that she had no interest in the land and seeking removal of the caveat. 3 Brereton J delivered the judgment appealed from, Kira Holdings Pty Ltd v Daquino [2010] NSWSC 494, on 20 May 2010. His Honour held that Mrs Daquino had no beneficial interest in the land on broadly two bases. One was that as a matter of construction of the relevant legal documentation her interest was restricted to receiving a sum of money identified in the schedule to the 1992 deed. The other was that as a matter of fact she had received that money. 4 Brereton J made an order for costs against Mrs Daquino, including an order that subject to one particular exception the costs be paid on an indemnity basis. To a significant extent the decision to award indemnity costs was based, as the judge said at paras [40] and [41] of his judgment, on Mrs Daquino putting the respondents to proof of what the judge described as "essentially every significant factual matter" and her responding to notices to admit facts by disputing all those facts, which the respondents then proved. 5 I also note that at para [4] of his judgment the judge had decided that the case before him should not be delayed until some other proceedings taken in 2009 concerning the trust had been decided, and that the decision of Brereton J was one that was given after an expedited hearing. 6 On 10 June 2010 the solicitors for the respondent set in train the steps needed to obtain an assessment of the costs of the proceedings that Brereton J had decided. They sought costs and disbursements of the order of $188,000. 7 Another set of proceedings has been begun in the Equity Division, No 10/51498. Those proceedings were begun on 26 February 2010. The plaintiffs in them are Mrs Daquino and three of her children. The defendants are Kira, Chipping Norton and some other people. In those proceedings the plaintiffs seek declarations that the plaintiffs have a caveatable interest in what remains of the land held by Kira, and that the proceeds of sale of those lots that have been sold were held on trust for them. They seek orders that the 1992 documentation be set aside on the basis that it was entered as a result of misrepresentation or breach of fiduciary duty or, alternatively, under the Contracts Review Act 1980. They seek damages for losses that have been incurred by the plaintiffs as a result of the defendants dealing with the land inconsistently with the rights of the plaintiffs, and taking of accounts. 8 On 8 June 2010, that is after Brereton J had given the judgment that is now appealed from, Kira and Chipping Norton filed a Notice of Motion in proceedings 10/51498 seeking to have those proceedings dismissed, struck out or permanently stayed. 9 Mrs Daquino has filed an appeal against the judgment of Brereton J. She challenges both Brereton J's construction of the relevant documentation and his factual conclusion that she has received all the relevant money. 10 The Motion before me today is one that seeks a limited stay pending the hearing of the appeal. What Mrs Daquino seeks to have stayed is the hearing of the Notice of Motion filed on 8 June 2010 and the application for costs assessment. The basis of the application is that if these two proceedings are not stayed and Mrs Daquino succeeds in the appeal some costs will be incurred which might not be wasted costs in the event of the appeal succeeding. 11 The court's power to stay arises, at least in part, under s 135 of the Civil Procedure Act 2005 and under r 51.44 of the Uniform Civil Procedure Rules. Section 135 enables the court to give directions with respect to the enforcement of its judgments and orders. Section 135(2) gives some examples of the types of directions that are possible. UCPR 51.44 enables there to be a stay of "the decision below or the proceedings under the decision". Fairly clearly, seeking assessment of the order for costs counts as "proceedings under the decision" of Brereton J. Thus there would be power under the rule to stay those proceedings. 12 One can fairly readily foresee that the terms of the Brereton J's decision of 20 May 2010 will play an important role in the argument concerning the Notice of Motion in 10/51498 but there is a question about whether that is enough to bring it within the ambit of this court's power to grant a stay. The Notice of Motion does not seem to be either "the decision below" nor "proceedings under the decision" that is appealed against, and thus does not appear to fit readily within UCPR 51.44. Nor does staying the Notice of Motion in proceedings 10/51498 seem to readily fit within s 135, namely giving directions with respect to enforcement of judgments and orders. However there is, I note, an inherent power to ensure that the pendency of an appeal is not an instrument of abuse of process. When the question of the court's jurisdiction was not the subject of any detailed submission in argument the preferable course is for me not to decide the question of jurisdiction but rather to proceed by assuming, without deciding, that the power to stay extends widely enough to enable this court to require the Notice of Motion filed on 8 June 2010 not to be heard. 13 In response to a specific question that I put to Mr Locke, counsel for the appellant, I was informed that it was not submitted that anything would happen outside the court system itself if the judgment were not stayed. Thus, there is no reliance in the present case on a basis that is frequently relied upon for stays, namely that if no stay is granted then property will be sold or some other event will take place outside the court system with consequences that cannot readily be unscrambled if the appeal succeeds. Indeed, the only event within the court system that is relied upon as a basis for a stay is potential waste of money. 14 I have been reminded of the overriding purpose provision in s 56 of the Civil Procedure Act that the court is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. Mr Locke has submitted that preventing unnecessary waste of costs by granting the stay would be consistent with s 56. I would accept that cost considerations are ones that can legitimately enter into a decision about whether to grant a stay. But in 10/51498 there could be waste of costs if there is a hearing of the Notice of Motion that proves unnecessary if the appeal produces a certain outcome, and there could also be waste of costs if 10/51498 proceeds and the appeal produces a different outcome. 15 Frequently a decision about whether to grant a stay involves balancing incommensurable factors. Here the prima facie right of the successful party below to have the fruits of its victory needs to be balanced against the prospect that some costs may be wasted if the appeal ultimately succeeds, but that no other irretrievable damage will be done. 16 In all these circumstances I am not persuaded that the balance comes down on the appellant's side. The Notice of Motion is dismissed with costs. **********