New South Wales Supreme Court CITATION : Bydand Holdings Pty Limited v Pineland Property Holdings Pty Limited [2009] NSWSC 1327 HEARING DATE(S) : 27 November 2009 JUDGMENT OF : Hammerschlag J EX TEMPORE JUDGMENT DATE : 27 November 2009 DECISION : Judgment of 10 November 2009 against Mr Pang be stayed up to and including 26 March 2010 CATCHWORDS : PROCEDURE - judgments and orders - in general – stay of judgment until appeal – applicant not in position to meet judgment debt – applicant is sole director of company trustee for family trust – applicant has 25% of the issue shares in the trustee and is one of three discretionary beneficiaries – net trust assets approximate $20,000,000 – trustee may decide to dispose of assets to assist applicant in payment of judgment debt – undertakings proffered by applicant to prosecute appeal expeditiously, not to sell or deal with applicant's own only real property asset – undertakings accepted – stay granted on condition that applicant makes payments corresponding to interest on judgment debt to judgment creditor on a regular basis – no issue of principle CATEGORY : Procedural and other rulings Bydand Holdings Pty Ltd (ACN 097 171 456) - Plaintiff PARTIES : Pineland Property Holdings Pty Ltd (ACN 099 857 735) - First Defendant Knight Frank Australia Pty Ltd (ABN 17 004 973 684) - Second Defendant Vincent Pang - Third Defendant FILE NUMBER(S) : SC 50058/2008 COUNSEL : P.T. Russell [Plaintiff] C.J. Birch SC with A.S.G. Cassells [Third Defendant] SOLICITORS : Barringer Leather Lawyers [Plaintiff] Maxim Legal Pty Ltd [Third Defendant] - 4 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST HAMMERSCHLAG J 27 NOVEMBER 2009 50058/2008 BYDAND HOLDINGS PTY LIMITED -V- PINELAND PROPERTY HOLDINGS PTY LIMITED & ORS EX TEMPORE JUDGMENT 1 HIS HONOUR: On 10 November 2009 I gave judgment for the plaintiff against the first defendant, Pineland Property Holdings Pty Limited and the third defendant, Mr Vincent Pang ("Mr Pang") jointly and severally for $3,629,793.21. Mr Pang moves by Notice of Motion dated 16 November 2009 for a stay of the judgment until an appeal, which he proposes to bring against it, is determined or until further order of the Court. 2 The evidence relied on in the motion consists of two affidavits of Mr Pang, sworn 19 November 2009, and 26 November 2009 respectively, and two affidavits of Mr Pang's personal tax agent and accountant Mr Eng Chuan Ow sworn 19 November 2009 and 26 November 2009 respectively. 3 The thrust of the affidavits is that Mr Pang is not in a position to meet the judgment debt. In addition, he gave oral evidence in the clearest terms that his assets consist - and consist only - of assets described in a schedule being Exhibit "EO1" to the affidavit of Mr Ow sworn 19 November 2009. 4 Mr Pang is the sole director of Timberland Holdings Pty Limited which is the trustee for the Pang Family Trust ("the trustee"). He also owns 25 percent of the issue shares in the trustee. Mr Pang is one of three discretionary beneficiaries. The others are his mother and his sister. His father, since passed away, was a remaining shareholder. Under the terms of the trust deed, there was reserved to his father a Power of Appointment. The Power of Appointment now vests in his sister and enables her to remove the trustee. To this point, it has not been exercised. 5 The trust has significant real property assets and significant financial obligations to lenders on the security of those assets. 6 On the material before the Court the equity in those assets approximates $20,000,000. Mr Pang does not have any beneficial interest in those assets, being the object of the discretionary trust. The trust may be in the course of disposing of assets which would put it in a position to assist Mr Pang by way of a distribution, if that were decided by the trustee, but that is a matter for it. 7 According to Mr Pang's affidavit of 19 November 2009: a "the corporate trustee", as he describes it, is seeking to ascertain whether monies can be released to him by way of an advance of capital to pay the judgment debt; b this will depend on whether properties proposed to be sold will realise their estimated value; c the corporate trustee will have to negotiate with the trust creditors for the realisation of some of its assets; and d that this process could take up to six months, given that Christmas is approaching. 8 Mr Pang states in his affidavit that he is happy to report to the plaintiff's lawyers on a regular basis as to the steps the corporate trustee is taking to achieve that realisation and he says that if the Court does not grant a stay of the judgment, he would be unable to prosecute his appeal. 9 On 26 June 2009 Mr Pang was found guilty of contempt by Einstein J for breaching an undertaking to the Court. His Honour made significant adverse findings against Mr Pang and his credit. The circumstances of the trust, as well as his Honour's findings, have caused me to scrutinise the application for a stay very closely. I have also borne in mind the presumption that a successful judgment creditor is entitled to the fruits of its judgment. 10 I have been provided with a draft notice of appeal with grounds. Counsel for the plaintiff suggested that the grounds are without merit. That will be a matter for the Court of Appeal. I do not think it can be said that the appeal is unarguable. I have also given consideration, and raised with the parties, significant and stringent conditions which would be annexed to any stay. Undertakings have been proffered by Mr Pang which go a long way to satisfying me that a stay is appropriate in this case. 11 In addition, Mr Pang is proffering as a condition of the stay, to make payments on a continuing basis so as to assuage any detriment the plaintiff may suffer as a consequence of the lapse of time between the judgment and any unsuccessful appeal. 12 I propose to order a stay to 26 March 2010 and to stand the motion over to that date in the motions list. I note the undertakings given to the Court by Mr Pang in the document which I have initialled and dated today's date. I accept those undertakings, which I shall read on to the transcript: "I, Vincent Pang, undertake to the Supreme Court of New South Wales that: 1 I shall expeditiously prosecute my appeal in regard to the judgment of Justice Hammerschlag of 10 November 2009. 2 I shall not sell, dispose of, mortgage or deal with, other than to maintain the lease thereof and maintain payment of all liabilities, including mortgage liabilities of 12 George Street, Burwood. 3 Upon the return of this motion to the Court, to inform the Court by way of affidavit of any steps taken on behalf of the Pang Family Trust to realise the assets of that trust and of the negotiations between my mother and sister in regard to whether there will be any advances from the trust to permit me to pay part or all of the judgment debt." 13 I accept those undertakings. On the basis of those undertakings and on the conditions which I shall further specify, I order that the judgment of 10 November 2009 against Mr Pang be stayed up to and including 26 March 2010, on condition that: a Mr Pang pays to the plaintiff forthwith the sum of $21,651. b on or before 1 December 2009 Mr Pang pays to the plaintiff the sum of $30,903. c on or before the first day of each month commencing 1 January 2010 until the appeal is determined or until further order of the Court Mr Pang pays to the plaintiff $31,961. 14 The parties have liberty to apply on three days notice. The costs of this motion will be costs in the appeal. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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