Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Bishay v Moskios [2013] NSWCA 22 Hearing dates: 11 February 2013 Decision date: 11 February 2013 Before: Allsop P Decision: 1. Set down the application for leave to appeal not before 11.15 am on 20 February 2013. 2. Subject to order 3, until midnight on 20 February 2013 or the resolution of the applicant's application for leave to appeal, stay the operation of orders made by the District Court on 2 August 2013. 3. Such stay is not to prevent the respondent in any way taking any steps against the first applicant in bankruptcy. 4. Costs of the motion for stay be costs in the applications for leave to appeal. Catchwords: PRACTICE AND PROCEDURE - no question of principle Cases Cited: Re Sarina; Ex parte Wollondilly Shire Council [1980] FCA 138; 32 ALR 596 Category: Procedural and other rulings Parties: Reda Bishay (First Applicant) Splendid Developments Pty Ltd (Second Applicant) Terry Moskios (Respondent) File Number(s): 2012/246033 Decision under appeal Date of Decision: 2012-08-02 00:00:00 Before: Curtis DCJ File Number(s): 2008/317505 Judgment 1ALLSOP P: On 2 November 2012 the applicants, Mr Reda Bishay and a company in which he is involved, Splendid Developments Pty Ltd, filed a summons seeking leave to appeal from orders made by a judge of the District Court in settlement of a building dispute between the applicants and the respondent, Mr Moskios. That summons for leave to appeal has not as yet been given a hearing date. The applicant's written outline of submissions is ready and the matter is able to be heard next Wednesday 20 February by reason of a settlement that occurred in the Court of Appeal last week. 2I propose to set the application for leave to appeal down to 20 February. The application is only an application for leave to appeal. The matter is under $100,000 in the judgment sum. It is a building dispute. The primary consideration against Mr Bishay was the identity of the parties to the contract which his Honour dealt with in part by reference to matters of impression of witnesses and the construction of documents. 3It will be necessary on that application to show a number of things. First, that there are reasonable grounds to think that the primary judge, Curtis DCJ, made an error of consequence liable to have the judgment set aside. Secondly, even if that prima facie ground be shown, that there is a particular reason beyond the possibility of error that the appeal should go forward, such as may warrant the grant of leave. There may be a matter of importance, whether of contract law or some other character, that reveals a reason why leave should be given. This additional consideration is particularly the case in matters under $100,000 when there is a policy to resist the incurring of further appeal costs when there is an apparently regular judgment of the Court below to which, even if it has some aspect of error possibly attendant to it, the parties should be held in small to modest matters such as this. I say that for the assistance of Mr Bishay; there appear to be some difficulties in relation to persuading a court of the necessary errors in the primary judge's reasons and that leave should be given in a matter under $100,000. In any event I am not hearing the leave application. That leave application, as I said, can be heard within the next ten days. 4The question then arises as to whether or not the position should be held by way of a stay. The difficulty with this is that proceedings have already been taken in the Federal Magistrates Court on a bankruptcy notice for the judgment sum. It is said by Ms Gordon, who appears for the respondent Mr Moskios, that time for compliance with the bankruptcy notice has now expired and did expire on 28 November 2012. Thus, if it be the case that there is no other defect in the documentation upon which the petitioning creditor will move and if there are no other circumstances to prevent a sequestration order being made, no stay order now will or can interfere with the progress of the bankruptcy proceedings. 5Those submissions may be correct but bankruptcy proceedings are not formal debt collection proceedings; they are proceedings of significant public importance changing the status of debtors. The next bankruptcy hearing is listed for 19 February. As I understand it, on that day, from what Ms Gordon has said, her client will seek to pursue Mr Bishay and press for a sequestration order. It goes without saying that this Court does not have any jurisdiction in bankruptcy and will not via any order interfere with the processes of the Federal Magistrates Court. However, as I said, bankruptcy proceedings are no formality. One aspect which the petitioning creditor will have to prove next week is the insolvency of Mr Bishay. If Mr Bishay is not insolvent the law says he cannot be made bankrupt: Re Sarina; Ex parte Wollondilly Shire Council [1980] FCA 138; 32 ALR 596. Therefore I cannot assume that the sequestration order will be made next week. It may or it may not; it is not a matter for this Court. There are other potential ways of enforcing the judgment. Steps have been taken to date against Splendid Developments but are not in present contemplation, I assume because of the lack of substance of the company. 6It seems to me that to the extent that there are rights to seek leave to appeal and to the extent that these rights can be vindicated or otherwise within ten days a stay would not be inappropriate. As Ms Gordon says, the stay should only be given if there is some risk of interference with rights. The stay that I would propose would protect such rights as Mr Bishay has to propound his application for leave to appeal but such stay would be expressly conditioned as to not interfere with any steps being taken in the Federal Magistrates Court on 19 February or at any other time. 7Although the risk of interference with Mr Bishay's rights is small, so is the stay, and for those reasons I would make the following orders: 1. Set down the application for leave to appeal not before 11.15 am on 20 February 2013. 2. Subject to order 3, until midnight on 20 February 2013 or the resolution of the applicant's application for leave to appeal, stay the operation of orders made by the District Court on 2 August 2013. 3. Such stay is not to prevent the respondent in any way taking any steps against the first applicant in bankruptcy. 4. Costs of the motion for stay be costs in the applications for leave to 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 February 2013