Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Richardson v Lindsay [2019] NSWCA 30 Hearing dates: 18 February 2019 Decision date: 18 February 2019 Before: Leeming JA Decision: (1) That enforcement of the costs order made on 22 October 2018 against the appellant and in favour of the respondents be stayed until further order. (2) I note that order 1 is subject to any subsequent order made in this Court, and will lapse of its own force when orders are made finally disposing of the appeal. (3) No order as to the costs of the notice of motion of 12 February 2019. Catchwords: PRACTICE – stay of execution – expedited appeal by unsuccessful impecunious plaintiff from final hearing dismissing her claim – defendants/respondents take steps to have costs order of trial quantified – appellant seeks stay of execution of costs certificates pending appeal – stay granted Cases Cited: Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 Kalifair Pty Ltd v Digi‑Tech (Aust) Pty Ltd (2002) 55 NSWLR 737; [2002] NSWCA 383 New South Wales Bar Association v Stevens [2003] NSWCA 95 Richardson v Lindsay [2018] NSWSC 1457 Category: Procedural and other rulings Parties: Lurline Faith Richardson (Applicant) John David Lindsay (First respondent) Fiona Judy Lindsay (Second respondent) Representation: Counsel: H Jewell (Applicant) D Neggo (Respondents) Solicitors: Seniors Rights Service (Applicant) Whiteley Ironside & Shillington Pty Ltd (Respondents) File Number(s): 2018/325406 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Equity – Expedition List Citation: [2018] NSWSC 1457 Date of Decision: 28 September 2018 Before: Sackar J File Number(s): 2018/107944 [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.] ex tempore Judgment 1. HIS HONOUR: Before me is a notice of motion filed on 12 February 2019 seeking a stay of the enforcement of costs orders made by the primary judge (Sackar J) on 22 October 2018. The application and its outcome on the view that I take turns very much on the procedural history of the litigation both before the primary judge and in this Court. 2. The underlying facts seem to be that in around 2011, the plaintiff Ms Lurline Richardson, a woman who is currently around 84, transferred some $220,000 to her fourth child, the second respondent Ms Fiona Lindsay, and her husband Mr John David Lindsay who is the first respondent, in connection with the acquisition of property in which she with her daughter and son‑in‑law could live. The arrangements were associated with a Deed of Family Arrangement which the primary judge has reproduced in para 14 of his Honour's reasons. Abbreviating much of the detail, the primary judge found that the plaintiff who is now the appellant moved into the contemplated house at Orange in around December 2011, thereafter lived there for slightly more than three years, after which there was a further move to a property at Lewis Ponds, leading to the sale of the Orange property in March 2015. At some stage thereafter it seems, all parties moved into the Lewis Ponds property but on about 8 June 2015 the plaintiff left. Thereafter, she has been living in rented accommodation. The litigation concerns the return of the $220,000 and the assertion by Ms Richardson of a charge over the property representing (it may be inferred) the traceable proceeds of the $220,000. 3. Proceedings were commenced in March 2018 and were placed in the expedition list of this Court. They came on rapidly for hearing, and there was a trial before the primary judge over three days: 10, 11 and 21 September 2018. The primary judge produced what appear to be comprehensive reasons for judgment occupying 50 pages, promptly, on 28 September 2018: Richardson v Lindsay [2018] NSWSC 1457. His Honour dismissed the claim. 4. The chronology thereafter is of some significance. Although I have said that his Honour dismissed the claim, in fact, his Honour indicated that he would dismiss the plaintiff's claim and invited the parties to bring in short minutes of order. That occurred on 22 October 2018, when the proceedings were dismissed with costs. That is the costs order that founds what has now crystallised as costs certificates that are the subject of this notice of motion. 5. On 24 October 2018, Ms Richardson filed a notice of intention to appeal (that is to say, two days after orders were made). On 31 October, Ms Richardson filed a notice of appeal. On 21 November, the matter came before the Registrar in this Court, where counsel who have appeared before me today also appeared, and the hearing date of 17 April 2018 was allocated. There was discussion before the Registrar, according to a note on the file, of an application for security for costs. No such application was in fact made, although there was correspondence between the parties on 23 and 26 November 2018, in which the respondents' solicitor expressed the view that his clients were considering making an application for security for costs of their appeal. The prompt response from Mr Tunbridge of the Seniors Rights Service dated 26 November 2018 (exhibit C) was that such an application was opposed, because it failed to have regard to the requirement for special circumstances, and because it would stifle the appeal. As I have said, no such application was brought. 6. However, the respondents thereafter sought to assess the favourable costs order made by the primary judge. It was their right to do so, although at all times that has taken place in circumstances where there is a pending appeal, to be heard on 17 April this year. Notice of that process of assessment was communicated to the appellant's solicitor by letter dated 17 December 2018. On 8 January 2019, Mr Tunbridge responded to the respondents' solicitor asking for his agreement to postponing the assessment of costs and threatening an application to this Court for a stay in the event that such consent was not obtained. The response, dated 14 January 2019, was to identify the basis for the stay and, fairly and squarely, to state that this letter was "not to be taken as consent for a stay" and that "the costs assessment procedure will continue until such consent is given." 7. The next event that seems to have occurred, with a promptness that is somewhat unusual, is that on 4 February 2019, the costs assessor (a barrister in practice) indicated that the assessment was complete and that certificates (both for the determination of costs and for the assessment costs) would issue upon the filing of a fee. Those certificates have issued and are the subject of the motion. They are in the amounts of $67,390.96 and $1,463. 8. The applicable principles on an application for a stay like this are not in doubt. Prima facie a successful party to litigation is entitled to the fruits of the judgment and is entitled to be protected so far as is practicable from the risk, that if the appeal be unsuccessful, assets which were earlier available to satisfy the judgment might no longer be available for that purpose: see Kalifair Pty Ltd v Digi‑Tech (Aust) Pty Ltd (2002) 55 NSWLR 737; [2002] NSWCA 383 at [28]. That principle applies equally to a quantified costs order as it does to a substantive judgment. The overriding principle in such a case is to ask what the interests of justice require: New South Wales Bar Association v Stevens [2003] NSWCA 95 at [83]. The relevant principles in that respect are contained in Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 694 and include that the onus is upon the applicant to demonstrate a proper basis for a stay that is fair to all the parties, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties, and that where there is a risk that an appeal will prove abortive if a stay is not granted courts will normally exercise their discretion in favour of granting a stay. 9. The application in the present case was accompanied by the affidavit of Mr Tunbridge, who acted for Ms Richardson at first instance and again for her on appeal. The affidavit was short and did not disclose any information directly as to her impecuniosity. Attention was directed in their submissions by the respondents to: (a) the fact that in addition to the $220,000 the subject of the litigation, there was an amount of some $85,000 (from which certain expenses had to be deducted), obtained by the appellant from the sale of her home, and (b) the disbursements for the litigation in this Court and at first instance were being paid by some fashion which was unexplained by the evidence. 10. After debate and the opportunity for an adjournment, both sides acquiesced in a course whereby Mr Tunbridge gave testimonial evidence‑in‑chief, and was cross‑examined, about the financial wherewithal of his client. The result of that was that it appears that in the order of $10,000 by way of disbursements at first instance and in this Court have been provided by way of loan from two other daughters of the plaintiff, that she has around $800 or $900 only in a bank account, and there was some evidence which was less than complete as to what had happened to the difference of some $85,000 between the sale price of her home in 2011 and the amount paid to her youngest daughter and son‑in‑law. The evidence extended to the terms on which the current legal representation of the appellant is being paid: in short, legal services are being provided on the basis that fees will only be charged if and to the extent that favourable costs orders are obtained and amounts are realised from the defendants/respondents pursuant to those orders. 11. The starting point then is that the respondents are prima facie entitled to take such steps as they may be advised to take to realise the now quantified entitlement to approximately $70,000 by way of costs at first instance. That has occurred, however, in circumstances where at all time they have known that the underlying entitlement, by way of a costs order made last October at first instance, is the subject of challenge in this Court. 12. Obviously, if as the appellant contends, the primary judge has erred in rejecting her case, then the costs discretion will be re‑exercised, and if as she contends there should be judgment in her favour in the amount of $220,000 either by way of judgment or charge, then not only will the costs order be set aside but prima facie costs would follow the event in this Court and at first instance. Of course, a presently successful party who is seeking to defend his, her or its success when faced by an appeal is entitled to take such steps and to incur such costs as he, she or it sees fit in the meantime always subject to the risk that that time, effort and money is wasted in the event that the appeal is allowed. 13. I turn to the practicality of what is sought and what is opposed. In the relatively near future, what is presently uncertain will be known. By that I mean that either on, or in the weeks or perhaps months after 17 April 2019, all parties will know whether in fact the respondents are entitled to the approximately $70,000 to which they are presently but contingently entitled for the costs at first instance (of course, there will also be costs in this Court which will become known at that stage as well). There is nothing in the evidence to suggest that the appellant can from her own funds meet the costs orders which have presently been made adversely to her. There is nothing in the evidence to suggest that her position will become substantially better or adverse in two or three or four or maybe five months' time. Significantly, there is nothing in the evidence to suggest that there is any prejudice to the respondents in the delay ‑ which in the scheme of things is relatively short ‑ in executing such entitlement to costs as they have. 14. One possibility is that the appeal is dismissed. It is quite possible that Ms Richardson is unable to meet the judgment debt of $70,000 which will arise if the costs certificates are lodged in a Court of appropriate jurisdiction. But that is likely to be the case whether or not that happens now or next month or in five or six months' time. Another possibility is that the costs certificates are lodged, take effect as judgments, are not paid within the 28 days prescribed by the UCPR, and in the middle or towards the end of March, the respondents issue a bankruptcy notice to Ms Richardson. If those steps occurred, this Court would lack jurisdiction to make any orders to either set aside or extend the time for compliance of a bankruptcy notice; that is now within the exclusive jurisdiction of the Federal Court of Australia or the Federal Circuit Court. However, in circumstances such as this, where the hearing of the appeal from inter alia the costs order sustaining the bankruptcy notice is set down for 17 April 2019, and, significantly, all steps to quantity that costs order have taken place in circumstances where that appeal has already been set down, I think it is highly likely that any judge before whom any such application came, whether in the Federal Court or the Federal Circuit Court, would extend the time for bankruptcy, should any such application be made. 15. Those practical considerations lead me to conclude that, save for one thing, there is very little utility in the steps taken to date by the respondent to seek to quantify the order that has been made. There is nothing to suggest that the appeal will not be heard on 17 April 2019, unless in some means the respondents procure the appointment of a trustee in bankruptcy to Ms Richardson, and the trustee chooses not to persevere with the appeal. But the practical considerations that I have already adverted to cause me to doubt that that is a practical possibility given the timing. 16. The qualification to which I referred, is that Mr Neggo says and it is not without force, that at present there is some incentive on the part of those of her children who have been supporting Ms Richardson in her litigation to date to come forward and assist their mother to discharge that obligation while the appeal remains undetermined, and that his clients may suffer an additional risk of the judgment debts not being satisfied if the appeal is heard and reserved or if it is heard and determined adversely to Ms Richardson. But that risk is entirely unquantified, and unsupported by evidence, and in part it suggests that this application really this is, as a matter of substance, a means of obtaining by default some form of security for costs of the appeal. 17. One thing which I need to add is that at no stage has it been suggested that the appeal which is listed for hearing on 17 April 2019 is hopeless or close to hopeless. 18. For those reasons, I have concluded that a proper basis has been made out for what in the event will be a relatively short stay of execution between now, 18 February, and some such time after 17 April 2019 in which judgment is reserved, if indeed it is reserved when the appeal is heard. 19. Accordingly, I order: 1. That enforcement of the costs order made on 22 October 2018 against the appellant and in favour of the respondents be stayed until further order. 2. I note that order 1 is subject to any subsequent order made in this Court, and will lapse of its own force when orders are made finally disposing of the appeal. [Discussion as to costs]. 1. No order as to the costs of the notice of motion of 12 February 2019. ********** 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: 22 February 2019