Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Moon v Mun [2012] NSWCA 369 Hearing dates: 5 November 2012 Decision date: 05 November 2012 Before: Barrett JA Decision: (1) Order that the judgment of the Local Court made on 7 March 2012 in proceedings 2011/00286543 be stayed until determination of the pending summons for leave to appeal filed in this Court and, if leave is granted, until the determination of the appeal or, in any case, until earlier order of this Court. (2) Order that the respondent to the notice of motion filed on 11 October 2012, pay the applicants costs of that notice of motion. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: PROCEDURE - application for stay pending hearing of application for leave to appeal - no matter of principle Legislation Cited: Uniform Civil Procedure Rules, rule 17.7 Cases Cited: Kalifair Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737 Category: Interlocutory applications Parties: Young Soo Moon - First Applicant Sung Shim Lim - Second Applicant Soon Sil Mun - Respondent Representation: J Hewitt - Applicants A Chee - Respondent Dahan Lawyers - Applicants KDL Legal - Respondent File Number(s): 2012/286045 Decision under appeal Citation: [2012] NSWSC 973 Date of Decision: 2012-08-24 00:00:00 Before: Schmidt J File Number(s): 2012/99913 Judgment 1The applicants have filed a summons by which they seek leave to appeal from a decision of a judge of the Common Law Division dismissing an appeal from the Local Court where a money judgment of some $32,000 including interest had been given against the present applicants and in favour of the present respondent. 2Now before me for determination is an application for an order staying the judgment of the Local Court until determination of the proceedings that have been commenced in this Court. 3The judgment in the Local Court was given in consequence of a decision by the magistrate that the present applicants' defence should be struck out. The magistrate referred to several deficiencies in the defence and took the view that, because of those deficiencies, the defence was not viable. 4The magistrate then immediately stated without further discussion that there would be judgment for the plaintiff, that is the present respondent. There had been earlier a brief reference by the magistrate to the allegations in the statement of claim. 5On appeal to the Supreme Court, the primary judge said that it was not clear why the magistrate had struck out the defence, particularly as there was no application in that regard. As to the judgment in favour of the present respondent, the primary judge took the view that, although there had been no reference to relevant provisions of the Uniform Civil Procedure Rules, the case was one of judgment on admissions as contemplated by rule 17.7, noting that there were some admissions in the defence and others in submissions made before the Local Court. 6If allowed to appeal to the Court of Appeal, the applicants will argue that the matter was never in fact approached as a case of judgment on admissions. There was no explicit application in that respect and the applicants say, in any event, that the conditions necessary to permit exercise of the discretion to allow judgment on admissions were not satisfied; also that, even on the facts including those derived from admissions, the elements essential to a cause of action in debt which is what the respondent pleaded, were not established (I would add as an aside, that there seems to me to be a distinct possibility that, if there were any valid claim, it would be a claim for unliquidated damages for breach of contract by defaulting purchasers, not a claim in debt). 7A point is also raised as to whether the Local Court and the primary judge were correct when they said that a form of set-off that the applicants put forward or attempted to put forward (there is a question about the extent to which it was ventilated) could only be advanced by cross claim. 8One of the matters to be considered on an application such as this is the viability of the proposed appeal. On that, it is sufficient for me to say that there are clearly arguable aspects such as to constitute prospects of success. 9I must then consider the balance of convenience and the respective degrees of hardship. 10On that, the most pertinent point is that the respondent has used the Local Court judgment as a basis for issuing a bankruptcy notice against both of the applicants. 11The bankruptcy notice was received by the applicants on or about 7 September 2012 and, on 27 September 2012, they filed in the Federal Magistrates Court, an application to extend time for compliance. That application came before the Federal Magistrates Court on 9 October 2012 and was opposed by the present respondent because the applicants had not sought a stay of the Local Court judgment. Over that opposition, the court extended the time for compliance until 6 November 2012 on condition that the applicants seek a stay of the Local Court judgment. The indication was, it seems, that there would likely be a further extension if such a stay were ordered. 12From the applicants' point of view, therefore, there is the detriment that, in order to avoid committing an act of bankruptcy, they will have to satisfy the Local Court judgment that they say should have been set aside by the Common Law Division in the proceedings in respect of which they wish to appeal to this Court. That detriment will materialise, it seems, unless the judgment is stayed. From the respondents viewpoint, the only apparent detriment arising from a stay will be delay in enforcement of their judgment by bankruptcy proceedings or otherwise and therefore a deferral of their enjoyment of the fruits of their judgment. 13In these respects, the balance of convenience favours the applicants. 14In addition, refusal of the stay could, it seems, lead to bankruptcy of the applicants the consequences of which upon the continued availability to them of a cause of action in this Court would be more radical than those of the possible company winding up that was influential in the decision in Kalifair Pty Ltd v Digi-Tech (Australia) Ltd [2002] NSWCA 383; (2002) 55 NSWLR 737. 15The applicants have shown circumstances warranting the exercise in their favour of the discretion to order a stay. 16The orders are as follows: (1) Order that the judgment of the Local Court made on 7 March 2012 in proceedings 2011/00286543 be stayed until determination of the pending summons for leave to appeal filed in this Court and, if leave is granted, until the determination of the appeal or, in any case, until earlier order of this Court. (2) Order that the respondent to the notice of motion filed on 11 October 2012, pay the applicants' costs of that notice of motion. 17In conclusion I would repeat what I said in the course of submissions, namely, that this is a very small claim and that parties should be urged to consider mediation or other means of resolving their differences so as to avoid what could be substantial further costs out of all proportion to the size and shape of the case itself. ********** 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 November 2012