Atia v Nusbaum (No 2)[2011] QCA 182

SUPREME COURT OF QUEENSLAND

FRASER JA:  This is an application by the appellant to stay a judgment given in the trial division on 14 April 2011.  The judgment was for $1 million and interest and costs in favour of the respondent against the appellant.

The substance of the application by the appellant is that he has an arguable appeal and that unless there is a stay it is likely that he will be made bankrupt before the appeal is heard, in which event he would not be able to prosecute the appeal.  If that were all that was involved in the stay I would readily grant it. 

However, the evidence before me relied upon by the respondent demonstrates that during the trial the appellant transferred shares in a company with which he has some connection to his wife.  Submissions had been made in writing in this application and in an earlier application that an inference should be drawn that there was a risk that the appellant would take further steps to put assets beyond the reach of execution by the respondent were she to succeed in the appeal.  In effect, the appellant has been on notice for some considerable time that unless he offered security in some form for the respondent the Court would be invited to refuse the application for a stay for that reason.

The respondent's position if a stay is granted and she succeeds in defeating the appeal might be worsened in a number of respects if a stay is granted today.  The first is that which I have mentioned, namely, the appellant might put assets beyond the reach of execution.  Related to that is the fact that interest on the judgment is running in the order of $270 per day and no provision is made for that interest by the appellant.  There is also the fact that the respondent has served a notice of bankruptcy on the appellant and an act of bankruptcy will shortly be complete unless the appellant secures an extension of time for compliance with the bankruptcy notice.  If a stay is granted and the bankruptcy cannot proceed there is a prospect that will prejudice any trustee in bankruptcy or the respondent in seeking to claw back assets which may already have been transferred. 

In the absence of any protection by the appellant for the respondent's position in the event that the appeal fails, I would ordinarily not be prepared to grant a stay.

The appellant puts forward a number of arguments as to why I should nevertheless grant a stay.  One of them is that, the action having been brought on a mortgage granted by the appellant to the respondent, the appellant had improved the respondent's position at about the time when the mortgage was granted because he had paid out a first mortgage to the Bank of Queensland.  That, however, is one of the issues upon which he might have relied at trial; and as to whether the point has any merit I cannot now decide it.  Another point he makes is that he has good prospects of success in his appeal.  However, on the face of the judgment, it is a careful and detailed judgment.  There is no basis for thinking on the material I have seen that the appeal does have good prospects of success.  I have proceeded on the basis that the appeal should be assumed to be arguable, although in truth I cannot assess its prospects.  Therefore I cannot accept the submission that some advantage that the appellant gave to the respondent should be taken into account in this stay application.

The appellant also makes the point that there have been significant delays on the part of the respondent in seeking to recover monies which she claimed and for which she obtained a judgment at trial.  On the face of the material to which the appellant pointed there were some significant delays, and that was reflected in a diminution in the amount of interest awarded by the trial judge.  It does not seem to me, however, that those delays have any particular bearing upon my discretion today.  I was referred by the appellant to Drew v Makita (Australia) Pty Ltd [2008] QCA 312.  As I understand the decision, reference was made to an argument that similar delay was relevant, but that factor was not significant in the decision in the case.  Nor is it significant here.

In the result I am not prepared to grant the application for a stay, on certain conditions.  There is evidence which might support an inference that the respondent too might possibly take action to put her assets beyond the reach of the appellant in the event that the appellant succeeded in his appeal.  In order to meet any such argument the respondent has offered undertakings which, in effect, are designed to ensure that the proceeds, if any, which the respondent might obtain by executing upon the judgment, as well as the proceeds that the respondent might obtain by exercising a secured right under a mortgage to secure the judgment debt, will be kept in the trust account of the respondent's solicitors.  I am prepared to accept that those undertakings provide reasonable protection for the appellant against any disposition of the proceeds of sale or the proceeds of execution of the judgment. 

That being so, it seems to me that the considerations very strongly favour the refusal of the appellant's application for a stay.  So I order that upon the undertaking of the respondent given by her counsel to give all instructions, sign all documents and do any such things as to cause any proceeds of the sale of the property at 8 Kilkenny Court, Sorrento and the proceeds of any enforcement of the judgment, the subject of this appeal, to be paid to the trust account of her solicitors, Adamson Bernays Kyle and Jones, and upon the undertaking of the respondent's solicitors to invest any money received from the sale of 8 Kilkenny Court, or any enforcement action upon the judgment, in an interest bearing deposit and to retain such money until the determination of the appeal or earlier order:

1. The application be dismissed.

...

HIS HONOUR:  The second order is that I reserve the costs of and incidental to the application for a stay to be assessed.